New figures show growing pension divide within DC schemes, says TUC

date: 22 February 2013

embargo: For immediate release

Commenting on the latest pension trend figures, published today by the Office for National Statistics, TUC General Secretary Frances O'Grady said:

'The difference between defined benefit and defined contribution pensions attracts a lot of attention. But there is an equally important - and growing - divide within DC schemes too.

'Increasingly, workers in trust-based schemes have employer contribution rates above eight per cent, which is essential to build up a decent retirement income.

'In contrast, a growing proportion of workers in contract-based schemes have employer contributions of less than four per cent. Many people saving into these schemes could find themselves with a low income in retirement, even after years of saving.

'While auto-enrolment will help more people to save into pension schemes, we still need staff and their employers to contribute more towards their retirement.

'Today's news about contribution rates provides yet more evidence that strong pension scheme governance and higher saving rates go hand in hand. That's why the TUC wants to see more employers taking up trust-based pension schemes.'

NOTES TO EDITORS:

- The latest ONS pension trends are available at http://bit.ly/VAm038

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @tucnews

Contacts:

Media enquiries:
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Alex Rossiter T: 020 7467 1337 M: 07887 572130 E: arossiter@tuc.org.uk