Golden days for some

FIVE-MINUTE GUIDE TO...  FINAL SALARY PENSIONS

- Harvey Jones

THE UK’s pensions system was once the envy of the world as millions of workers benefited from “gold-plated” final salary pensions that paid a guaranteed income for life based on earnings. Today, it lies shattered and broken.

The number of active members in private sector “defined benefit” schemes, as they are technically called now, has fallen almost two thirds in a decade, latest figures from The Pensions Regulator show.

By March, the number of active private sector schemes had collapsed to just 785,744, down from 909,502 the previous year – a decline of 13.6 per cent.

The regulator’s first report showed that a decade ago in 2012, schemes still had 2.1 million active members.

The decline began 25 years ago on July, 2, 1997, the day that Labour Chancellor Gordon Brown abolished tax credits paid to pension funds and companies, which cost firms billions every year and made final salary schemes too expensive to run.