UK employers may axe pension schemes ahead of personal accounts

Around four in ten UK employers are likely to consider closing their workplace pension schemes when the government's personal accounts come into effect in 2012, research has found.

Of those companies with workforces of 250 people or fewer polled by the Association of Consulting Actuaries, 41 per cent admitted that they would probably reconsider their own benefits packages in the run-up to the new pensions provision system.

In addition, just 16 per cent of those questioned stated that they have started to take into account the increase costs to them of the personal accounts initiative, which will see employers required to contribute around three per cent of an individual worker's salary, with the government adding an extra one per cent.

However, according to the Department for Work and Pensions, the new accounts scheme is designed to "complement not compete with existing pension provision".

"We want to get the details right and keep costs low so we'll continue to talk to employers and stakeholders and are consulting on key regulations," an official spokesman stated.

At the same time, research carried out by Aon Consulting has found that two in three workers believe they may have to delay their retirement plans as a result of the economic downturn. 

Is your company still running a pension scheme?  If you run a company how are you handling the pension situation?