The international credit crunch is placing increasing risk on UK pension schemes, an expert has warned.
Pensions are becoming less secure because employers are being squeezed by money lenders, according to David Poynton, head of credit analysis at actuarial consultancy Lane Clark & Peacock.
Money has been harder to come by since the collapse of the US sub-prime loan market, with UK bank Northern Rock a high-profile casualty.
The Bank of England reported last week that lending to businesses had been cut back in the wake of this crisis.
Lenders want higher fees and interest margins as well as stricter conditions, extra security and reduced amounts of credit.
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Poynton said: “This means that many sponsoring employers will be faced with increased costs of financing, as well as lenders looking for additional security for their lending.
“Shareholders are the most obvious losers from these developments, but the additional financial strain on employers can also weaken the security of pension benefits.”
