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WORKERS are getting meagre returns on their pensions investments while a “wealthy minority” reap most of the benefits, a new report finds.
The proportion of investments in the stock market held by pension funds has declined dramatically, the research shows.
The report, Do Dividends Pay Our Pensions?, was produced by the TUC and fair wage and equality think tanks the High Pay Centre and Common Wealth.
It says that the proportion of UK shares directly held by UK pension funds fell from almost one in three in 1990 to less than one in 25 by 2018 — a decline of over 90 per cent.
Over that period ownership of UK public companies shifted from UK pension funds to foreign owners and investors.
Shareholdings owned by foreign investors increased tenfold, from 5.6 per cent of share ownership in the mid-1970s to 55 per cent today.
TUC general secretary Frances O’Grady said: “Working people deserve a fair share of the wealth they create.
“This should come through wages, pensions and reinvesting profits to safeguard the future of the firm and its workforce.
“But in the last two decades, wages have stagnated. Pension schemes have been curtailed with the loss of defined benefits. And the connection between UK pensions and UK shares and dividends has been severed.
“This isn’t how it should work. But we can restore fairness by reforming company law so that directors have duties beyond short-term profits for shareholders.
“And we can restore the power that workers need to gain their fair share with stronger bargaining rights.”
Director of the High Pay Centre Luke Hildyard said: “Our research shows that a tiny and shrinking proportion of corporate Britain’s vast payouts to shareholders reaches ordinary savers, while workers are denied a voice in the running of the companies they help to succeed.”
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