Private wealth 'to cover cost of living longer'

Private wealth may become increasingly important as a means of providing for people in their old age, as one market expert claims final salary pension schemes are sinking into deficit as members live longer in retirement.

Danny Cox, head of advice at Hargreaves Lansdown, claims the increasing cost of such schemes, coupled with a decade of "poor performance" in equity markets, means plans that pay a proportion of a final wage are leading large firms into record deficits.

And private wealth stored in a selection of assets could cushion the blow of unreliable pension schemes, ensuring investors have a range of income options during retirement years.

Offshore banking funds may also be able to help, as they can offer different tax arrangements and so may be better placed to provide healthy returns.

The 17th annual Accounting for Pensions report from business consultants LCP revealed FTSE 100 companies paid a record-breaking £17.5 billion into their defined benefit schemes last year, a 50 per cent increase on 2008. ADNFCR-2318-ID-800015268-ADNFCR