Gold-plated final-salary pension schemes have been in terminal decline for more than a decade. The Coalition's policy of trying to shore up the economy by pumping more and more money into it has simply hastened the crisis and persuaded more pension trustees to panic and shut attractive schemes.
Just eight years ago in 2005 almost half – 43 per cent – of private sector final salary schemes were still open to new employees. Last year that number fell to just 13 per cent. The chances of any new workers joining a final salary scheme are extremely remote.
Research suggests that almost half the private firms that still offer final salary schemes are planning to close the pension to new staff, and offer them a defined contribution pension instead.
However, we should not yet write them off. As the National Association of Pension Funds points out, more than two million workers are still saving into a final salary scheme and they pay the pensions of more than four million pensioners.
That's six million folk that the Coalition should bear in mind as it continues its current controversial economic policy.Reuse content