Independent financial advice - pensions facts and figures
The UK pensions industry is in crisis according to independent financial advice
The statistics
The proportion of employees in final salary pensions schemes has fallen to a new low in the UK. The Office of National Statistics recently reported that membership of employer-sponsored defined benefit schemes fell from 39% to 35% between 2004 and 2005. In 1997 when records began, the figure was 46%. Overall take up of pension schemes is also down, with 39% of the 35.4 million working age population saving for their future in 2004-05 through an occupational or personal private scheme in 2005, down from 40% the year before. Conversely, defined contribution schemes saw an increase of membership from 10% in 1997 to 15% last year with more people taking independent financial advice about their personal pension plans.
Age Discrimination
From 1 October 2006, there is legal protection against age discrimination. It is no longer lawful to discriminate on grounds of age. The Employment Equality (Age) Regulations 2006 protects young and old alike. In recent years, enlightened employers have realised that there is an untapped market in the retired person who wishes to continue working - being of retirement age no longer means that you are over-the-hill or wish to have unlimited leisure time. Take independent financial advice to see how working beyond 65 could affect your pension.
Final salary schemes
Final salary schemes, also known as defined benefit schemes, can be very generous. They pay staff a set percentage of their final salary depending on their length of service. But there is a general concern about pensions in general, following pensions mis-selling in the 1980s and early 1990s and many companies now consider the schemes to expensive to run. More recently, reports have highlighted concerns over the funding of final salary schemes, with a number of FTSE 100 companies now thought to be facing a cash shortfall. Take independent financial advice if you are concerned about your final salary pension scheme.
What alternative pension might my employer offer?
If you're a new employee, you can ask your employer if they offer access to any other type of pension scheme, such as:
- a money purchase (or 'defined contribution') occupational pension scheme
- a group personal pension plan (GPPP)
- a stakeholder pension
If you join a GPPP or a stakeholder pension, your employer doesn't have to contribute to either, and you're likely to receive fewer benefits than employees who are members of your company's final salary scheme. Most Group personal pensions have an employer contribution although the law doesn't state that they must. Alternatively you can take independent financial advice about a personal pension plan.
You can have a brighter financial future. If you would like independent financial advice about a personal pension plan call our experienced advisers today on 0870 803 1995 or e-mail mike.robertson@mraltd.com
