UK Pension Calculator

Pension transfers, news, tips, plans, finance, QROPS...

Fri 28 Jul 2017 11:44 GMT
UK Pension Calculator

UK Pensions the Easy Way

Helping You to find the best UK pension plan

Final salary pensions could disappear in a decade

Final salary pensions could disappear in a decade
Published:  3 Jun at 9 AM
Pension experts are warning that all final salary pension schemes at Britain’s largest companies could be closed within the next 10 years. According to consultancy firm Towers Watson 34 per cent of FTSE 100 firms have no workers eligible for final salary pension schemes compared to just 4 per cent in 2010.

Low gilt yields and a longer life expectancy have made it more expensive for companies to provide pensions. Many firms are already struggling with large deficits and a change in the rules regarding National Insurance payments after the next election will make schemes even more expensive to run.

Large firms including DHL and Axa have already announced plans to shut defined benefit schemes to existing members. Towers Watson senior consultant, Will Aitken, said although it was not yet common practice to close schemes to current members the pace is quickening at a rate that could see all such schemes shut down within the next decade.

He added that widening deficits and changes to the NI rules could lead firms to make changes sooner rather than later.

At the end of last year the UK’s largest companies introduced auto enrolment into workplace pension schemes. According to Towers Watson around 90 per cent of those placed into the schemes have opted to remain.