UK employers left £32.6m in unpaid defined contribution (DC) pension contributions when they collapsed in the 2024/25 financial year, rising by 359.39 per cent since 2020/21 when the total was £7.1m, new freedom of information (FOI) data has revealed.

The number of employers who entered insolvency with outstanding pension obligations in 2024/25 was 5,121 – almost three times more than in 2020/21, when the figure was1,842.

The data, obtained by Liquidation Centre, showed that in total there was £140.5m in pension contributions left unpaid since 2020, highlighting the impact that business closures can have on retirement savings.

The financial year 2024/25 saw the highest value since the start of the pandemic, with outstanding pension contributions already at £30.6m for 2025/26.

The Liquidity Centre estimated there will be £40.2m left unpaid in this financial year, 2026/27.

Commenting on the figures, Liquidation Centre director, Richard Hunt, urged UK employees to review and understand whether their pension is defined benefit (DB) or DC, as this could change their protection if their employer entered insolvency, with DB pension contributions protected by the Pension Protection Fund (PPF), and DC pensions protected by the Financial Services Compensation Scheme (FSCS).

Hunt said: “The biggest reduction typically happens with DB pensions, as while the PPF generally pays 90 per cent of what you were promised, you may still see a 10 per cent cut to your expected retirement income.

“Brits aged 65 to 74 have an average pension pot of around £145,900, according to the ONS, which could mean a reduction of ~£14,590,” he added.

He encouraged savers to regularly compare their payslips to pension provider statements, to ensure that contributions are being paid appropriately and to get ahead of any delayed, missing or lower than expected payments.

He added that if savers notice anything unusual, they should contact their pension provider and make a report to The Pension Regulator, who requires employers to pay contributions on time.

---