The UK government has proposed scrapping the pension schemes of tens of thousands of people, saying they are a drag on economic growth.
The government is calling on companies and banks to slash their retirement benefits by up to 60 per cent and reduce pension contributions by 20 per cent, according to the Financial Times.
The government has already introduced a scheme to reduce retirement benefits of about 2.5 million people, the FT said.
A Treasury spokesperson told the paper: “We’re committed to a more generous and progressive approach to retirement benefits.
We’ve been working closely with employers and banks on this over the past 12 months and it’s clear that they are struggling to find ways to deliver a fairer and more generous pension for the future.”
The new proposals would affect more than two million people.
There have been several reports that pensioners were making a big saving by reducing their retirement contributions, and that they were struggling to afford to live.
Companies have been offering workers reduced pensions since at least 2015, according the FT.
“The current system, where people are stuck with a pension that is very generous, is one that is not sustainable in the long term,” Chris Hill, chief executive of the CBI, said in a statement.
“The government needs to act now to end this cycle.”
A number of companies have already announced plans to cut back on their retirement payments.
Banks have been looking to cut their contributions to the scheme, and some companies have also proposed cuts to their pension plans.
Citi said it will be announcing a review of the scheme this month.
In March, the UK government announced it was launching a review into the retirement savings of over half a million pensioners.
Earlier this month, the government said it was planning to create a new scheme to provide more money to those who want to save for retirement.