Official figures this week show Britain’s employers are shovelling cash into their defined-benefit schemes in unprecedented dollops. Partly this is due to regulatory chivvying. Under the new regime, employers normally have to put in place plans to plug their deficits within ten years. Partly, it is due to the lashings of cash thrown off by many blue chips. Without a murmur, HSBC has been able to find £1 billion to boost its pension fund, Royal Bank of Scotland £750 million and Lloyds TSB £200 million. But the real force behind shrinking deficits has been the rising yield on corporate bonds, a key figure used to put a present-day value on future liabilities. This figure has grown by half a per cent since the start of the year, which in rough terms shrinks future liabilities by a colossal 10 per cent.
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