Staff are paying more money into their pensions than their employers, research has revealed.
Figures from the Office for National Statistics (ONS) show that employers paid £40.6bn into company pensions in 2008, a £4bn (9%) drop year-on-year, but workers paid in £42.5bn, according to the Daily Mail.
Companies are under no obligation to pay anything into a pension for their workers.
However, by 2012, firms will automatically enrol employees onto pension schemes. Those with more than 120,000 staff will be forced to contribute at least 1% to employee pensions, rising to 3% by 2017.
The ONS blamed the drop in employer pension contributions on “increased pressure on employers’ finances in the context of the recession”.
Public sector workers continue to be immune from the pensions meltdown. The cost of paying pensions to NHS workers, teachers, the Civil Service and the Armed Forces was £770bn in 2008, excluding local government workers and MPs.
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Liberal Democrat pensions spokesman Steve Webb warned that firms are likely to cut contributions further. “It could all get a lot worse,” he said. “It is the shape of things to come.”
Pensions minister Angela Eagle said: “There has been a market failure in the provision of pensions for low and medium earners. However, from 2012, our reforms will ensure millions more workers have access to workplace pension saving with a guaranteed contribution from their employer, many for the first time.”
