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Stakeholder &#39failing to plug pension gap&#39

The average monthly contribution to an employer-sponsored stakeholder scheme is just £44, which is £250 less than someone needs to save each month to produce a pension of half their salary, according to the Trades Unions Congress.

Research released by the TUC at its annual conference in Blackpool last week analysed Inland Revenue statistics revealing the number of employer-sponsored schemes and total contributions made.

According to the Revenue, there are 440,000 employer-sponsored schemes with total employer contributions of £130m a year, equivalent to £25 per employee each month. Total employee contributions amount to £100m a year, representing monthly savings of £19 each.

The figures differ slightly from ABI statistics, which put the average contribution at £66, but both organisations agree that more needs to be done to encourage saving.

Liberal Democrat pension spokesman Steve Webb says the latest figures back up his party&#39s long-running claim that stakeholder on its own will not motivate people to save enough.

The TUC says the Revenue&#39s figures show the average employer contribution is 1.25 per cent of the average UK salary of £23,607 while the average contribution from employees is less than 1 per cent.

TUC general secretary John Monks says: “These shocking figures show that stakeholder is doing little to plug the pension gap among those who do not have a proper occupational pension.”

ABI spokeswoman Emma Grainge says: “These figures do not concur with our own but both indicate people are not saving enough.”

Webb says: “This is symptomatic of the wider problem. These numbers show that, even when an employer is contributing, they are really only scratching the surface in terms of what they are paying in.”

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