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DWP: DB pension payouts to peak in 2012

Defined-benefit pension payouts will peak this year as the Government prepares to automatically enrol millions of workers into defined-contribution schemes.

Research from the Department for Work and Pensions reveals the average DB pension in payment will reach £7,100 a year, the highest ever level, towards the end of 2012.

The Government expects this figure to fall to to around £2,400 a year by 2060.

Pensions minister Steve Webb (pictured) says: “A generation ago employers provided final salary pensions and took on all the uncertainty – the perfect retirement solution for those lucky enough to have one.

“With payouts peaking this year, final salary schemes closing and figures that show that only 38 per cent of working-age people are saving into a private pension, it’s clear that we are facing a different world in pensions.

“That is why our workplace pension reforms are so critical, bringing millions of people into pension saving for the first time.

“Underlying this is our plan to bring in a new single tier state pension – an absolutely crucial foundation as one in three of us are now expecting to live to 100.”

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