The UK Government has announced controversial plans to UK final s alary pensions which could drastically reduce the benefits which members are currently entitled to. Under the proposals, which are subject to a six week consultation, the Department for Work and Pensions is planning on removing pension scheme obligations to provide Index linked increases to pensions, potentially increase a members retirement age and remove the right of Widows to receive a pension upon the death of their spouse.
These new measures, which could come into force in April, will see the real “value” of an individual’s pension slashed overnight and put even more pressure on individuals to ensure that they have their own arrangements in place to ensure that they have sufficient pensions in place for not only when they retire but also for their surviving spouse once they pass away. Should these proposals come in to force many members of these schemes will feel that they have been lied to over the years with promises of “guaranteed” pensions that will take care of them and their loved ones in retirement. It many instances these promises made by companies helped them to retain staff from leaving companies and giving up their “gold-plated” pensions.
So why is the Government proposing these changes?