BP and Barclays latest employers to close final salary schemes

| June 3, 2009 | 0 Comments
BP and Barclays latest employers to close final salary schemes

Oil giant BP announced yesterday it is to close its UK final salary pension scheme to new members from April next year, in a bid to cut costs for the company.

The scheme currently has more than 60,000 members, with 12,000 staff paying in.

In the meantime, banking giant Barclays has announced today that it will close its final salary scheme to existing members.

Defending the move, the bank said “It is in the best interests of all Barclays employees and shareholders for us to do so.”

However, according to trade union Unite, “the attack on the pensions of the loyal and hard-working staff at the bank is utterly alarming.”

The closure of pension schemes to new staff started in the mid-1990s and similar moves have been made at employers such as Rentokil, WH Smith and Fujitsu.

The fact that people are living longer and stock market volatility are having an impact on final salary schemes.

In related news, a recent survey commissioned by the BBC has revealed that saving for a pension is not a top priority for many UK adults.

The report revealed that half of adults in the UK aged between 20 and 60 are not putting anything towards a pension with the situation being worst for those under the age of 30.

However, in a bid to encourage Brits to save towards a pension, the Government is to introduce Personal Accounts in 2012 which will be a state-sponsored pension arrangement.

Employees will be enrolled automatically, contributing 4% of their salary. The employer will pay 3% and a further 1% will come from tax relief.

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