The trend moving away from final salary occupational pension schemes towards defined contribution ones is costing employees up to £1.6bn a year in pension contributions according to Close Wealth Management.
Research from the fund group points to the 900,000 employees who have seen their DB schemes close since the decline began have missed out on the £1.6bn figure.
Chief executive Martin Smith says: “Many employers are closing their DB schemes and offering their staff defined contribution plans instead. These have no long term liabilities for employers but they mean lower contributions for employees. Indeed, the average company contribution level for a DB scheme is 14.83 per cent compared to 7.41 per cent for a DC plan.”