Around 15 per cent of employers reported that at least 2 per cent of their workforce have reduced or opted out of pension contributions over the past year, according to Broadstone’s latest UK Employee Benefits Landscape Report.

The consultancy warned that the trend is an early sign of mounting financial pressure and weakening saver confidence at a time when adequacy is already under scrutiny.

The report also found that among employers who adjusted their benefits packages following the Autumn 2024 Budget, 43 per cent introduced salary sacrifice schemes.

However, Broadstone stressed that this response is now complicated by the Chancellor’s new salary sacrifice thresholds set out in the 2025 Budget.

While salary exchange remains widely used, with 83 per cent of organisations now operating the arrangement, Broadstone cautioned that upcoming reforms may make it harder for employers to sustain contribution levels.

Indeed, cost pressures and regulatory change are prompting more employers to reassess their pension arrangements, with almost a third expecting to make scheme changes within the next three years – nearly double the proportion in 2023.

Meanwhile, the report also highlighted persistent knowledge gaps.

Nearly one in five employers did not know what type of pension scheme they operated, while only 34 per cent understood the expected retirement outcomes for their employees.

Broadstone warned that this leaves schemes exposed as regulatory expectations tighten under the Financial Conduct Authority's (FCA) Consumer Duty and The Pensions Regulator’s (TPR) focus on value for members.

Commenting on the findings, Broadstone head of defined contribution (DC) workplace savings, Damon Hopkins, said: “The past two years have seen significant changes to the nation’s workplace pension provision, with further reform on the way as the government undertakes its Pensions Commission on adequacy.

"In the meantime, employers have had to juggle significant increases in national insurance and economic volatility, while the 2025 Budget delivered another hurdle in the form of future changes to pensions salary sacrifice arrangements.”

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