Workers are leaving pension schemes or cutting their contributions, trade unions say, as the cost of living crisis prompts desperate measures that will reduce their retirement funds.

The warning comes as UK inflation is predicted to hit 18.6 per cent, the highest rate among larger western economies, and as real wages fall at the fastest rate for at least two decades.

The Trades Union Congress, the UK’s main movement for organised labour, said a growing number of its members in the private and public sectors were leaving their pension schemes.

“In the face of falling pay and rising bills, it’s understandable workers feel under pressure,” said TUC deputy general secretary Paul Nowak, who called on employers to do more to support staff, including increasing pay.

The BTU, an independent union that represents employees of Lloyds Banking Group, told the FT it had seen similar actions by bank staff.

Also you may interesting in
UK pension funds lose case to block RPI inflation change
UK. Pensions industry urged to join forces to address adequacy concerns

“We’ve been contacted by Lloyds members who are reducing their pension contributions because of the cost of living crisis,” said Mark Brown, general secretary of the BTU.

One employee, a customer services assistant earning close to £23,000, said she had decided to reduce her contributions from 3 per cent to 2 per cent.

However, lower paid staff have to contribute 6 per cent to their pension pot to receive the maximum 15 per cent company contribution compared with the 3 per cent required for senior bankers, including chief executive Charlie Nunn.

Read more @FT Adviser