Companies increased pensions' contributions in first quarter: ONS |
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Published
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Fri, 14 Jul 2006 15:20
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LONDON - The latest figures from the Office for National Statistics show that companies have increased their contributions into self-financed pension schemes. This move could end up costing the government £5.4 billion in tax this year.
Companies contributed £12.2 billion in the first three months of this year, an increase of 58 percent over their contributions at the same time last year. They had contributed £7.7 billion the last time around. Several companies like HSBC have made a lump sum contribution at the beginning of the year. The change is supposedly triggered off by alterations to pensions' rules as well as the fact that the government has instructed firms to sort out their pensions deficits at the earliest.
"The rise in employer contributions is happening earlier and to a greater extent than many people expected," commented Stephen Yeo of the actuaries Watson Wyatt. "If the trend continues over the remainder of the year, £18bn more will be paid into schemes in 2006 than in 2005, which was itself a record year for employer contributions." The increase in contributions could mean that employers will contribute £130 billion by the end of the year.
Some of the major firms that have committed more money to their schemes include Bank of England, HBOS, WH Smith, Sainsbury's, British Airways, BAE Systems, Diageo, Rolls Royce, Reuters and Lloyds TSB.
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