UK Royal Mail looks to clear GBP5.6bn pension deficit

Royal Mail is ramping up payments into its pension scheme in a bid to fill its £5.6bn pension deficit black hole, according to reports.

An agreement with its pension trustees sees Royal Mail up its payments into its pension scheme to £750m from £480m, paid annually for the next 17 years, reported the Daily Telegraph.

It is not clear how the Royal Mail will fund it, with operating profits at £355m last year. Cost-cutting measures have been suggested as a likely strategy to help fund the pension deficit.

The Pensions Regulator has stated it wants companies to clear their pension deficits over a ten-year period.