Barclays closes final salary scheme for 18,000 staff

Barclays today closed its final salary pension scheme to all members telling its 18,000 active participants that from December they will move into a less expensive and less rewarding money purchase scheme.

Until today the largest final salary pension scheme to close completely was Rentokil when it faced a massive restructuring.

But many schemes, including BP yesterday, have shut their doors to new recruits. Barclays did that more than a decade ago.

The National Association of Pension Funds forecast earlier this year that up to a quarter of private sector firms were looking at closing their final salary schemes this year. Companies are currently reckoned to have a combined deficit on their pension schemes of around £200 billion.

Trade unions reacted angrily to Barclays' announcement. Rob MacGregor, Unite National Officer, said: "Unite views this proposal as a break in the promise by Barclays to their workforce that they will not put profits before people. This attack on the pensions of the loyal and hard-working staff at the bank is utterly alarming. The union is urging the bank not to establish this change."

A Barclays spokesman said: "Given the economic situation, managing costs — including pension costs — is one of our priorities. It is in the best interests of all Barclays employees and shareholders for us to do so."