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HBOS deal could lead to monster pension burden

If Lloyds TSB buys UK mortgage lender HBOS it could assume responsibility for a total pension deficit of almost £1bn (€1.3bn), the largest of any UK bank, according to research published today. The news could raise further concerns about the proposed deal, which has come under pressure from some Lloyds TSB shareholders.

At the beginning of the year, Lloyds TSB's pension fund deficit stood at £683m, and the HBOS pension scheme's deficit was £291m, according to research by actuarial and investment consultants Punter Southall. The figures suggest a total pension fund deficit of £971m if the firms merge.

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