David Prosser: Shock pension news: there is no crisis
Thursday 29 October 2009
Outlook Good news and bad for the future financial security of those currently in work. Official figures show that more people are putting money into occupational pension schemes – despite what you may have heard about their demise – but also that they are saving less than they once did.
Overall, the Office for National Statistics says, nine million people are now active members of occupational pension schemes, up from 8.8 million a year ago. But less than a third of these savers are now members of final salary schemes, with the rest in defined contribution plans.
Either way, employees themselves contribute broadly similar sums. But employers' contributions are markedly different, the ONS says. Typically, employers pay around 15 per cent of pay into final salary plans, but only six per cent into defined contribution schemes.
As a result, while more people reaching retirement age in the future will have some private pension income on which to rely, the majority will be significantly worse off than those who have retired on final salary benefits. Some may even still qualify for top-up pension benefits from the State's means-tested system.
Nevertheless, the ONS's data suggests that pension provision is not suffering the crisis one might think given the collapse of so many final salary plans. With auto-enrolment on the way in 2012, there is a decent base on which to build much wider participation in saving for old age in the future.
The figures also suggest that members of public sector pension schemes, which now account for an even greater proportion of the final salary plans still open, will find it even tougher to defend the more generous benefits they receive.
- 1 Scientists create transparent mouse complete with see-through organs
- 2 Pope Francis issues top 10 tips for happiness
- 3 Disney heiress Abigail disowns her share of family profits in West Bank company
- 4 Israel's propaganda machine is finally starting to misfire
- 5 Amazonian Indian tribe filmed making contact with Brazil village in rare video footage
Mystery of the Siberian holes at the end of the world 'solved': Scientists offer explanation
Pope Francis issues top 10 tips for happiness
Kenny Ireland dead: Benidorm actor dies aged 68
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
Putin v Obama: Russian deputy prime minister mocks president with catty pictures on Twitter
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
A new Russian revolution: The cracks are starting to appear in Putin’s Kremlin power bloc
- < Previous
- Next >
iJobs Money & Business
£300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...
£500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...
£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...