'Pensions timebomb may sink top firms'

The looming pensions crisis could send some companies to the wall, a leading insolvency expert warned today.

Rising pension costs combined with a less buoyant economy could send already cash-strapped companies into receivership, according to accounting firm KPMG.

The warning came as carmaker Peugeot UK, which employs 3,500 people in Coventry, revealed that its pension pot is facing an £86million shortfall.

The firm has called on workers to increase pension contributions from three to five per cent of wages and has closed its final salary scheme for new recruits.

Other companies with pensions deficits include Marconi (? 137 million), Securicor (£54million) and ICI (£453 million).

KPMG partner Jim Tucker said companies in manufacturing and others which have shrunk back their workforce were most at risk.

"These companies may only have a small number of existing members to fund a scheme which is supporting a large number of pensioners or deferred members," he said.

City & Business