The Royal Bank of Scotland (RBS) has cancelled a dividend-linked contribution to its main UK pension scheme in light of the Covid-19 pandemic.

In response to a formal request from the Prudential Regulatory Authority (PRA), the RBS board has decided to cancel the final ordinary and special deficit payments in relation to the 2019 financial year.

It had made an agreement with the scheme trustee in April 2018 to pay annual contributions into its main UK scheme from 2020, at a level matching shareholder distributions during the year.

The value of the payment was a maximum of £500m per year, dependent on dividend levels, and a maximum cumulative total of £1.5bn.

However, in light of the Covid-19 crisis and PRA request, it will not be making the payments this year.

Commenting on the announcement, RBS chief executive, Alison Rose, said: "RBS has a robust capital and liquidity position and we are focused on ensuring we support our customers and help them to navigate the immediate and longer-term challenges they are facing as a result of Covid-19.

"As we continue to build a purpose led bank, we are committed to balancing the needs of all our stakeholders.”

Furthermore, housebuilding company, Taylor Wimpey has announced that its executive directors will be taking a voluntary 30 per cent reduction in base salary and pension contributions for the duration of the government-imposed lockdown.

The firm stated: “The decision to take a reduction in base salary is supported by the whole board and therefore the non-executive directors will also take a 30 per cent reduction in their fees for the same period of time.

“The objective of these changes is to conserve cash, with a particular focus on protecting the long-term financial security of the business as a whole, for the benefit of all of the company's stakeholders.”

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