The UK pensions industry has largely welcomed reassurance from the government's retirement scheme watchdog that it will be "flexible" and "practical" with regard to how much companies will have to pay to rescue insolvent pension funds, in the light of the economic crisis. However, some raised concerns that aspects of its guidance might be counterproductive.

In a statement this morning, David Norgrove, chairman of the Pensions Regulator, made clear it was unacceptable for companies to return capital to shareholders ahead of topping up their pension funds, if they have previously agreed a plan to fix a serious funding shortfall.