Dec 12, 2019

Britain sees pension plans replaced by defined-contribution schemes

Data: Office for National Statistics, Wealth and Assets Survey; Chart: Danielle Alberti/Axios
Data: Office for National Statistics, Wealth and Assets Survey; Chart: Danielle Alberti/Axios

Britain, like the U.S., is seeing its defined-benefit pension plans inexorably replaced by defined-contribution schemes in a deal that's sure to hurt workers.

Where it stands: 10 years ago, there were roughly twice as many active members of defined-benefit schemes as there were in defined-contribution plans. Today, the numbers are roughly equal.

By the numbers: The median member of a defined-benefit pension plan in the U.K. has £83,200 ($110,000) in pension wealth. The median member of a defined-contribution scheme, by contrast, has just £5,000 ($6,600) in their plan.

  • Britons are eligible for a state pension — the U.K. version of Social Security. That caps out at £129.20 per week, which is less than $9,000 per year; hence why pension plans are so important.

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