Prospects for pensions

TUC, Great Russell Street, London WC1B 3LS

Hardly a week goes by without another survey or news story about the flight away from final salary pension schemes. In this report the TUC accuses employers of giving in to a "herd mentality" and calls on them and the government to live up to their responsibilities on pensions.

The TUC estimates that, in the last 10 years, the number of employees covered by final salary schemes has dropped by nearly two million to 3.8 million. It argues that the current crisis can only be tackled if employers make compulsory contributions to occupational pensions, and workers join the company scheme as a condition of employment.

The report stresses that, while the UK's pensions system has always been based on the principle that the state, employers and individuals should share responsibility for retirement provision, the state and employers are now

backing away from this commitment.

The TUC is also concerned that workers on modest incomes may find it hard to maintain their current commitments and save for a pension. The report suggests that there should be incentives, including a pension tax credit, to make saving more affordable for lower paid employees.