Market 'can plug £70bn pension gap'

COMPANIES can reverse a claimed £70bn pensions shortfall by keeping faith in the stock market, analysts have said. A new accounting rule - FRS17 - insists that deficits caused by recent market falls are made public in company accounts.

Many firms have responded by cancelling schemes linked to employees' final salaries. But a study by corporate pensions advisers Watson Wyatt concludes that the decline could be turned around if fund managers do not abandon shares.

Watson Wyatt's John Ball said: 'It boils down to the age- old advice that investing in the stock market is a long-term game. Over a period of ten years, we would expect those deficits to be wiped out by gains on the stock market.'