ClickAJob News

Britain's private pensions schemes are not guaranteeing workers a sufficient income to enjoy their retirement, executives have warned.

A survey of 100 major company bosses by investment group Fidelity International highlighted concerns with money purchase schemes, whose success relies on the levels of funds generated through investment in the stock market.

Over half said they were concerned by the potentially low levels of income they provided, despite the fact that many firms are switching to them.

"Finance directors are in the invidious position of knowingly providing many of their employees with an inadequate pension," Fidelity International's president of institutional business, Simon Fraser, warned.

Many firms in the private sector are struggling to prevent growing pension deficits, threatening the ability of final salary pension schemes, which provide a percentage of an employer's salary during their retirement, to continue.

High street retailer Marks and Spencer became the latest British business to acknowledge the growing pressure on its existing pension scheme yesterday. The chain announced a new plan to shore up its £704 million deficit with a property-based £500 million contribution.

Employees have already responded by moving away from reliance on private-based pensions. A survey from investment trust firm JP Morgan Asset Management published in October found that just 48 per cent of people relied on private pensions to fund their retirement.