‘Significant’ reduction in pension deficit cheers BT

Telecoms giant BT today welcomed a "significant reduction" in its pension fund deficit which has fallen sharply by £2.4 billion to £6.6 billion since the end of 2008.

BT credited the fall to improving stock markets and has injected an additional £525 million in cash.

The pension burden could be eased further by the Lib-Con Government's decision to change the inflation measure for pensions to the Consumer Prices Index, which tends to rise more slowly.

Like many other companies, BT has been struggling with the legacy issues of a final-salary pension scheme which has cast a shadow over its financial position.

BT, which was announcing first-quarter results, reported a 4% fall in revenues to £5 billion.

Adjusted pre-tax profits rose 17% to £446 million as chief executive Ian Livingston cut costs sharply and reduced some capital expenditure.

"We have made an acceptable start to the year," he said.

Livingston warned that some of his key customers, small and medium-sized businesses, were still feeling the feeling effects of the recession.

"People are still buying broadband," he said, pointing out BT has won 90,000 new customers for the service.