UK workers receiving 'lower pay' as a result of higher pension deficit payments
A new report published by the Resolution Foundation has suggested that workers in the UK are receiving ‘lower rates of pay’ as a result of higher pension deficit payments.
The report revealed that workers are unfairly losing an average of £200 a year, and that low paid and younger employees are the most affected by the loss – many of whom are not entitled to the pension pots they are plugging.
Older workers and those already in retirement ‘stand to gain the most from the plugging of gaps’, the Foundation stated in its report.
The think tank revealed that UK businesses spent around £24 billion trying to reduce their pension deficits in 2016.
Matt Whittaker, Chief Economist at the Resolution Foundation, said: ‘Our research shows for the first time that there is indeed a link between rising pension deficit payments since the turn of the century and reduced pay.
‘With average earnings still £16 a week below their pre-crisis peak and prospects for a return to strong pay growth looking shaky, it’s important that younger and low paid workers don’t take a hit to their pay because of deficit payments to pension schemes that they’re not even entitled to.’