A new report from the Confederation of British Industries (CBI) shows that the pensions deficit was around £100bn at the end of 2003. It has been reduced by almost 40% on the CBI's £160bn estimate published last June.
The CBI puts the reasons for the turn around down to rises in the stock market and increased company pension contributions.
According to the report businesses will still have to make additional contributions averaging £6bn a year over the next three years. But it points out that this is around half the £12bn estimate that seemed likely at the height of the pensions crisis in the spring of 2003.
The crisis is by no means over but things are easing. The report shows that constraints on business investment caused by pensions funding problems are likely to moderate in 2005 and 2006.
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