UK Money News
11th March 2008
Pension reform could leave thousands worse off
Hundreds of thousands of workers are set to be worse off in their retirement as a result of the government's planned reforms to workplace pension schemes, it has been claimed.
Under the terms of the proposed changes, which come into force in 2012, personal accounts will be introduced for all employees over 22-year-olds who earn £5,035 or more.
However, according to research conducted by Fidelity International, up to 300,000 workers could be set to lose their existing benefits.
The firm calculated the figure after a poll found that just under seven per cent of 100 finance directors surveyed said they planned to replace their existing schemes with personal accounts, which feature a smaller government contribution than many schemes currently offered by public sector employers.
Simon Fraser, president of investment solutions at Fidelity, told the Guardian: "The government's original intention for personal accounts was to 'complement rather than compete' with existing provision, but our findings reveal that this will not be the case.
"There is clearly some confusion for companies not knowing what to do next. We recognise that everyone is striving for the same goal, but action needs to be taken now to mitigate the risk of the pension crisis deepening."
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