Two-thirds (35%) of private sector employees are not in a workplace pension, according to the latest edition of the Annual Survey of Hours and Earnings (ASHE) by Towers Watson.
This figure is down from 37% in 2008 and 45% in 1999.
The survey also underlines the ongoing shift from defined benefit (DB) to defined contribution (DC) pension provision.
Although 80% of public sector employees were active members of DB schemes in 2009, only 12% were building up new DB pension entitlements last year, down from 14% in 2008 and from 30% in 1999.
Mark Duke, senior consultant at Towers Watson, said: “This has been a decade of decline for private sector pension provision: more people either work for employers who do not offer pensions or fail to join the schemes available. The government intends to force employers to put their staff into pension schemes automatically, but has twice delayed these reforms because it loses tax revenue when people save for retirement.
“For the foreseeable future, the only way is down when it comes to the number of private sector employees with defined benefit pensions. Staff turnover is eroding the number of employees in DB schemes that no longer admit new members, and large deficits have persuaded more companies to force the pace of change by closing their schemes to existing members too.†
“More people are going to have to get used to the idea that the ups and downs of financial markets will have a direct impact on their retirement income.
“The spotlight on public sector pensions will only get brighter as DB pensions in the private sector become more and more rare.”
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