Reader's Digest collapses into administration

Reader's Digest in the UK collapsed into administration today after it failed to secure regulatory backing for a pension scheme funding deal.

Its embattled US parent group - Reader's Digest Association - said it was no longer able to support the British edition following the UK Pensions Regulator's decision not to give the green light to plans to fund its UK pension.

The British edition of the magazine has a history dating back to 1938. It has offices in Canary Wharf, east London, and Swindon, Wiltshire.

Administrator Moore Stephens said it was reviewing the title's financial position, but intended to continue publishing the magazine in the UK while it sought a buyer.

Last week's prize draw would also be paid out to winners, as the Reader's Digest prize fund is held in a trust, according to the administrator.

But the company said it was too early to comment on the future of the magazine's 117 UK staff.

The title's failure means its UK pension fund, which has 1,600 members, may have to be bailed out by the Pension Protection Fund (PPF) lifeboat.

The PPF pays out in full for members currently drawing a pension from failed schemes, but caps payment for those who are yet to retire at 90%, with a ceiling of around £28,000.

This limit is expected to leave around 32 members - 2% - out of pocket.

Reader's Digest has a circulation of 541,282 in the UK.

The group stressed that the UK administration will not impact its other titles across the world.