I woke up this morning to confirmation of Carillion going into receivership. The fallout may well be spectacular, with implications for public services as well as the customers and employees of the construction mega-firm which has 13 defined benefits pension arrangements in the UK, with a reported total deficit of £580m.
Once again we have a situation where thousands of scheme members will be transferred to the Pension Protection Fund, with the understandable confusion this will cause among people worried about their future and unfamiliar with how pensions work. There is a lot going on but it is essential that the pensions industry does its best to reassure scheme members of the benefits which they will receive and does not use this as another opportunity to spread panic among Carillion employees or indeed the members of other final salary schemes.
What we can do is to remind people of the protections that having savings in a pension can be a financial life-saver even if their employer is on shaky ground. While final salary schemes have the protection of the PFF – OK only 90% of the promised benefit but still effectively guaranteed – money purchase funds are held in trust for the members and protected against by creditors and are additionally protected against personal bankruptcy. Younger workers will still need to find replacement employment but they have at least some provision there for the future.
Members of any of the Carillion pension schemes can find further information via this link: https://www.gov.uk/government/news/carillion-declares-insolvency-information-for-employees-creditors-and-suppliers
The newspapers are also reporting the end of another celebrity marriage, that of Ant’n’Dec McPartlin and his wife of 11 years, Lisa Armstrong. As matrimonial solicitors know this is entirely to be expected, since the most common time to file for divorce has long been believed to occur just after the Christmas decorations come down and everyone returns to reality of normal life in January. Either they were only holding it together for the family so as not to spoil the holidays, or 2 weeks of unadulterated exposure to their significant other was just too much for them to take.
I am indebted therefore to Aviva who reported last week that the average cost of a divorce is now £14,500. This is not entirely due to scandalous legal fees, but includes related expenses such as selling the marital home and finding the new bachelor(ette) pad. Having gone through this process twice now, purely for research of course, I can confirm it’s not a something you can get over quickly either emotionally or financially. Aviva also points that the average age of divorce is rising which means the chances of having more assets to argue over is increased. We may not all have £31m, reportedly the amount available to Lisa in the UK’s largest ever settlement, but – as they say – every little counts.