Pension schemes 'on the way out'

Businesses in the UK could soon be closing their pension schemes to employees, new research has indicated.

According to findings from consultancy firm Watson Wyatt, 50 per cent of companies with defined benefit schemes expect to close them by 2012 and most believe that some changes will have to be made.

Head of corporate consulting with the company Rash Bhabra remarked that an increasing number of businesses were looking at the risks involved with pension schemes and that there was an air of inevitability about their closures.

"Those still in defined benefit schemes have been protected from the recent stock market downturn," she said, adding that these people would now have to deal with the problem of pensions themselves and could not rely on their employers to do so.

Watson Wyatt's study concluded that over one million employees currently on a defined benefits pension in accounting and finance jobs among others would perhaps have to rely on defined contribution schemes.

Recent research by the organisation found that employers were intending to reverse salary cuts and pay freezes, with 33 per cent planning to overturn the latter within the next six months.

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