Brits believe company pension schemes may close to all workers

Seven out of 10 Brits believe that company pension schemes could be closed to all workers as a result of the increase in tax on pension contributions for high earners announced in the 2009 Budget, according to a survey commissioned by Hymans Robertson, the leading independent benefits and investment consultant.

The nationwide survey reveals that almost half the nation (47 per cent) is aware of the increase in taxation, showing that pensions continue to be front-of-mind for the general workforce. Almost half (45 per cent) of the nation believe that the policy to increase the tax on pensions for people earning over £150,000 a year is a bad idea. Six out of ten (61 per cent) are fearful that the Government's new policy may lead to companies cutting back or closing pension schemes for all employees.

Patrick Bloomfield, Partner at Hymans Robertson, said: "There is a perception amongst many that the general public is not clued up on pensions issues, but our survey shows otherwise. Regardless of their own income, people are aware that the Government's increase in taxation for high earners will affect us all, as key company decision makers are less likely to keep a pension scheme open if they themselves stop paying into it because it is not tax effective.

"In an environment where even large companies such as BP and Barclays are closing their pension schemes, people are rightly concerned that their ability to save for retirement will suffer due to the recent Budget changes. With pensions rules constantly changing and the value of both company and state-provided pensions falling dramatically, employees are looking to their employers to support them as they endeavour to save money in preparation for retirement. We would urge companies to work with their employees to find a solution that benefits everybody.

"No doubt both BP's and Barclays' consideration of closing their pension schemes will have been well underway before the Budget. However, removing the attractiveness of pension schemes as a way of rewarding key highly paid employees will make the decision to close easier for other companies. Our survey shows that seven in ten people expect this to happen."