More than a million fewer Britons are members of a company pension scheme than a decade ago, according to official figures uncovered by the Conservatives.
Since 1997, more than 106,000 occupational pension schemes have been closed and 1.3 million people have ceased to be members of company retirement plans.
The Conservatives have blamed the reduction on Gordon Brown’s so-called “pensions tax raid” in 1997. The tax raid is regularly blamed for undermining the country’s previously robust pensions system.
When Chancellor, Mr Brown scrapped advance corporation tax relief on pension schemes – a decision estimated to cost occupational schemes about £100 billion.
The Conservatives today allege that if Labour is re-elected next year, a further 45,000 occupational pension schemes will close undermining the retirement plans of hundreds of thousands more people.
Philip Hammond, the shadow chief secretary to the Treasury, said: “Over the past decade, Gordon Brown has systematically undermined Britain’s savings and pension system.
“Today we see that a Labour fourth term could mean an additional 45,000 pension schemes closing, and one million fewer people saving for a pension. The stakes at the next election could not be higher.”
The tax raid now means it is increasingly rare for firms to offer their employees final-salary pension schemes.
The demise in company pensions has coincided with an extremely poor decade for the British stock market. This has led many people’s private pension savings to have dropped in value and hit their retirement plans.
Official research released last week found that about a quarter of people were now planning to work beyond the state pension age to help boost their retirement savings.
George Osborne, the shadow Chancellor, has pledged to reverse the affect of the pension tax raid. However, he has said that the poor state of the country’s public finances means that this will not be possible for at least five years, and will require the Conservatives to be elected at least twice.
Mr Osborne is also expected to reduce the generosity of pension schemes offered to public-sector workers, particularly those who are well-paid.
The sharp reduction in the number of company pension schemes is thought to be contributing to an increase in pensioner poverty.
Separate research from the Conservatives has estimated that 2.4 million pensioner households now officially face fuel-poverty.
The number of pensioners who have to spend substantial parts of their income heating their homes has risen four-fold in the past five years – partly as a result of the sharp increase in fuel prices.
http://www.telegraph.co.uk/finance/personalfinance/pensions/
