Scottish Power joins list of firms ditching final salary pensions

Utility firm Scottish Power has announced plans to close its final salary scheme to new members and raise its pension age from 63 to 65.

The plans, which follow similar moves by Rentokil and the Co-Operative Group, will also force thousands of existing members to increase contributions from 5% to 7% of annual salary over four years.

However, the pensions of employees who have been with the firm since before its privatisation in 1990 will be protected.

About 40% of the 7,600 employees who contribute to the final salary scheme would be exempt for this reason, Scottish Power said. The company has also promised to increase its own contribution from 15% to 17%.

A money purchase scheme will be brought in for new employees from April.

The company has started talks with the Unison and Amicus unions, which are expected to continue throughout January.

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