Occupational schemes see 400,000 drop in membership during 2007

Results from the office for national statistics' occupational pension schemes survey show the overall number of active employee members in 2007 was 8.8 million – a 400,000 drop compared with the previous year.

Liberal democrat pensions spokesman Jenny Willott added: "All the evidence shows that people need to be saving more and saving earlier in order to have a decent standard of living when they retire. Unfortunately, these figures suggest that the reverse may be happening."

There were 3.6 million active employee members within the private sector, a decrease of 400,000 on 2006, while the public sector accounted for 5.2 million members, an increase of 100,000 on the 2006 figure.

Some 2.7 million non-government employees were accruing new DB pensions.

The number doing so in 2006 has also been revised down from 3.4 million to 3 million.

Less than half of these – 1.3 million – worked for employers who still offer DB pensions to new staff.

Watson Wyatt head of UK defined benefit consulting John Ball said the number of private sector workers in open DB schemes has fallen beneath the level which the Pensions Commission originally hoped might be a long-term floor.

He said: "In 2004, the Pensions Commission thought the decline in DB provision might never get this bad. In fact, it has already got worse. These figures are already a year out of date and more employers have closed their schemes in that time.

"DB pensions have not died out completely, but the companies sticking with them are increasingly few and far between. Most have decided that the costs are simply too big and too unpredictable. Every time another company overhauls its retirement benefits, a few more employees cast envious glances towards the public sector."