Figures show the lowest company pension levels since the 1950s
The number of private sector workers with a company pension has fallen to its lowest level since the 1950s according to figures from the Office for National Statistics (ONS). Of the total private sector workforce of 23.1m, only 3.3m – some 14 per cent – are in a company scheme. This contrasts starkly with the public sector, where almost nine in ten will receive a pension.
The ONS recently published its latest Pension Trends report, and although it did not include provisions such as Stakeholder or Group Personal Pension schemes, it shows that 5.4m of the UK’s 6.2m public sector workers have a generous company pension – close to a record high.
The figure for the private sector has fallen to its lowest for decades. Since 1997, the proportion of private sector workers with a guaranteed defined benefit pension has dropped from 34 per cent to 11 per cent. This is the type offered to all State workers, which promises to pay a percentage of their final salary, or the average over your career, when they retire.
Joanne Segars, chief executive of the National Association of Pension Funds, warned that Britain’s ageing society is on ‘a collision course with its own retirement’ as it fails to save enough.
She said: ‘Far too many people are either choosing not to bother with their workplace pension, or are not being offered one in the first place.
‘This is storing up huge problems for the future. Those relying purely on a State pension face a rude shock come retirement and the grim prospect of their final decades spent in poverty.’
The basic State pension is currently worth a little over £100 a week, although many are not eligible to claim the full amount. The typical public sector worker enjoys a pension of £7,841 a year, or about £150 a week.
If a private sector worker happens to be in the minority that gets a company pension, the average payout is in the region of £1,300 a year – just £25 a week.