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The Lucky 13%
05.02.2013

Are you one of the lucky 13% of people who managed to gain entry into a final salary pension scheme in 2012?

Nicknamed the ‘gold plated pensions’, the final salary or defined benefit (DB) schemes, are rapidly being closed down by employers, as the benefits are guaranteed upon retirement and are too good to sustain.

The National Association of Pension Funds (NAPF) has released figures that show that 2012 showed the lowest levels recorded of entry into the DB schemes, 2011 had 19%.

However, due to market under performance and people now living much longer into old age than was originally calculated when these schemes first started in the mid 20th century, these schemes are often finding themselves massively underfunded and with deficits gaps that companies have to fill from their business profits.

It is no real surprise that the majority of the private sector is closing these schemes in favour of the defined contribution (DC) schemes instead.

According to NAPF only 43% in 2005 of new joiners could enter into a DB scheme.  Only the public sector in the UK remained with a large proportion of these defined benefit (DB) schemes.

Their time did appear to be limited in how long they could be sustained in this financial climate, being artificially subsidised by the public purse.

With the new workplace pension scheme, also known as NEST (National Employment Savings Trust) auto enrolled pension, UK employers are even more unlikely to maintain any DB schemes that may still be in place and even those who are already in one may find that it closes, before they benefit from it in retirement.

Even if you are one of the lucky ones still in a DB scheme, pension projections are key to understanding your personal situation.

Whether an individual or a business, for information on a personal pension health check and support on what NEST could mean for you, contact one of Guardian Wealth Management’s financial advisors, alternatively please visit the new NEST page on our website.


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