The Workplace Retirement Income Commission recently reported that millions of private sector workers face a ‘bleak old age’ because they fell through the cracks of pension provision.

Evidently the number of people saving in to company pension schemes in the private sector has almost halved since 1991! This may come as no great surprise given the shape of the current economy and a jobless total at a 17 year high, with any period out of work having a detrimental impact on an individual’s retirement savings.

However it is the constant meddling with private pensions by successive governments that has given cause for the biggest concern to pension savers, who eventually ‘call it a day’. Unless we have complete confidence in the ‘promise’ that our pension will be available when we eventually come to retire there will be no change to the current situation.

The latest threat to the ‘promise’ is the proposed change to pension increases as announced by the Government last year. This change is likely to mean that the value of most private and public sector pensions will be lower over time as a result of moving to an assumed Consumer Prices Index (CPI) rather than Retail Prices Index (RPI) rate of increase. Not all schemes will adopt this measure so you should check this in your forthcoming schemes annual report or contact the scheme trustees for further clarity. You should ensure your views are considered.

Thousands of workers at consumer goods giant Unilever are starting 11 days of strike action over proposed changes to their pension scheme. After all it may make the difference to ensure they do not a face a bleak old age!

How to avoid a bleak old age

• Keep saving on a regular basis, either to your company plan or personal plan
• Accept the company’s offer to contribute to a pension – do not ‘opt out’ of this valuable ‘free’ benefit
• Ensure you keep in touch with previous employers and understand what pension is on offer
• Understand what changes are being proposed to any of your pensions and check and challenge these
• Do not rely on what the State will provide as even this offers no cast iron guarantee