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‘Six million workers set to lose out under NPSS’

Six million company pension scheme members face a cut in their benefits under the proposed national pension savings scheme.

Research from Axa has found that 34 per cent of employers which contribute 3 per cent or more to a company scheme will consider reducing contributions to 3 per cent if the NPSS is introduced.

Forty-nine per cent of employers say they will not cut pension contributions if an NPSS is introduced.

In a separate study into employee attitudes to pensions, Axa found that 27 per cent of company pension scheme members are very keen on the concept of the NPSS. This represents 7.8 million people out of a total workforce of 28.9 million who endorse a mandatory pension.

Head of pensions and savings policy Steve Folkard says: “If the NPSS prompts 34 per cent of employers who currently pay 3 per cent or more to reduce pension contributions to 3 per cent, then there is a real risk that pension reform will result in throwing the baby out with the bath water.

“It is vital that those companies currently providing good pension arrangements for their staff are incentivised to continue to do so.”

Bestinvest business development manager Justin Modray says: “Employers are already not particularly motivated to contribute to their company’s scheme, so I can see a whole generation retiring on their own pensions. The Government will not want to reimburse more generous employers, so I fear the extra money will have to come from the individual.”

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