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Firm funds into UK workers pensions have fallen 16 per cent over the previous three years, or 30 per cent after adjusting for inflation, prompting worries about whether or not companies are doing sufficient to assist worker retirement.
British companies spent £36bn on worker pension contributions within the yr to September 2024, based on figures from the Workplace for Nationwide Statistics printed this month, down from a peak of £43bn in the identical interval three years beforehand, or £52bn after adjusting for inflation.
The autumn in contributions was pushed by a fast rise in UK authorities bond yields. This improved funding ranges for outlined profit schemes, which pay a hard and fast pension relying on wage, permitting firms to chop deficit discount funds.
The figures come as the federal government has delayed a overview of pensions adequacy, which had been anticipated to extend the quantity workers and corporations routinely pay into office retirement schemes.
The federal government has additionally introduced it’ll loosen the principles to permit firms to entry a number of the £160bn in company DB schemes that it estimates are in surplus — the place the worth of the property is larger than pension obligations.
“If the period of huge employer contributions is over and in actual phrases far much less goes into pensions as an entire, then we’re storing up issues for tomorrow,” stated Sir Steve Webb, accomplice at consultancy LCP and a former pensions minister.
“You possibly can perceive why employers, having confronted very giant and risky prices, don’t wish to go there once more . . . actions on the authorized [pension] minimums are much more essential,” he added.
Companies paid £14bn into outlined profit pension schemes within the yr to September. Three years beforehand, the determine was £27bn — or £32bn after adjusting for inflation.

Many DB schemes accrued large deficits as a result of a interval of low interest rates led to a rise within the worth of their liabilities.
However larger authorities bond yields in recent times have improved their funding ranges. In line with the ONS information, about 90 per cent of the decline in firm funds into DB schemes was brought on by decrease deficit discount contributions.
Over the three yr interval, employer funds into outlined contribution schemes, which give a pension that is dependent upon funding efficiency, rose from £15bn to £22bn. Most non-public sector employees within the UK have DC pensions.
In line with Bina Mistry, head of company pensions consulting at WTW, a rise within the variety of workers paying into DC schemes was “largely the explanation” that contributions had elevated. “During the last three years, there’s been no significant change in provision from firms on common.”
Below the present UK guidelines on DC pensions, employees are routinely enrolled and should pay in at the very least 5 per cent of their wage, plus a 3 per cent minimal from the employer.
Analysis by WTW discovered that bigger firms are likely to pay in additional, making a median minimal contribution of about 7 per cent.
Against this, employer contributions within the England and Wales native authorities pension scheme vary from 15 to 27 per cent.
The Pensions and Lifetime Financial savings Affiliation commerce group estimates {that a} quarter of households with DC pensions is not going to have saved sufficient to have the minimal £22,400 a yr it estimates {that a} couple wants for a fundamental lifestyle in retirement.
“We want a legislative highway map, with a phased method to steadily improve contributions to 12 per cent of complete earnings over the following decade for almost all of savers,” stated Zoe Alexander, director of coverage and advocacy on the PLSA.
In Australia, employers must pay in at the very least 12 per cent of wage into schemes from this summer season, whereas latest laws in Eire mandates a 12 per cent minimal contribution charge, break up 50/50 between employers and workers. In Italy, employers should contribute at the very least 7 per cent.