Rising annuity cost is increasing pension deficit, says Mercer

That is £10bn more than the gap recorded in March last year, when equities hit their lowest levels, Mercer says, defining the gap as the difference between full benefits promised to members of occupational schemes and the value of scheme assets. Longer life expectancy combined with falling competition in the life insurance sector mean the annuity rate increases have cancelled out any gains made by the market, the consultant says. The £330bn deficit compares to the estimated total value of pension scheme assets of £570bn and the total market value of listed companies of about £1.3trn. ...