The £420m Hoover Pension Scheme has decided to switch £100m of its assets out of index-linked gilts and into corporate bonds, using incumbent fund manager Phillips & Drew to effect the transition and act as corporate bond manager.

Barry Hawkins, Hoover's pension fund manager, said: 'We guarantee our pensioners an annual benefit increase of between 3% and 5%, and, in the current low inflation environment, index-linked gilts do not match our liabilities. Our consultants, Aon Consulting, advised us to go into corporate bonds. I think many schemes will try to get in there and we're trying to get in before everyone else does and the price goes up.'