Pension schemes in the UK could be left exposed by a decline in the amount British firms allocate to dividends, a new report has suggested.
Figures from the latest dividend study by Capita Registrars UK have revealed that British companies cut dividends by £10 billion last year.
According to the report, firms paid out £56.9 billion in 2009, a 15 per cent fall on the amount recorded for 2008.
Paul Taylor, the organisation’s head of dividends, said the economy has become too dependent on a handful of large firms, singling oil companies BP and Shell out as two examples.
"The recession has hit dividends particularly hard because companies have not only had to cope with falling profits, but also massive pressure on their ability to finance themselves. Preserving cash has been a top priority," he said.
Fears that the decline could leave pension schemes exposed could see a number of trustees looking at additional ways to fund their later years.
Those who have invested in property may be able to realise some of the value of their investments with an equity release scheme.
