Thousands of workers could face a hit to their retirement savings after companies across Britain collapsed owing millions in pension payments.
Experts are warning that growing business failures are putting more pension pots at risk.
More than £140.5million in pension contributions has been left outstanding since 2020 as thousands of British companies collapsed into insolvency.
Around £140,507,995.48 in pension contributions was unpaid when employers entered insolvency over the past five years, averaging around £23million annually, a Freedom of Information request by Liquidation Centre found.
The 2024/25 financial year recorded the highest level since 2020, with failed firms owing £32.6million in unpaid pension contributions.
More than 5,100 employers also went bust with outstanding pension debts last year alone, fresh data obtained from The Pensions Regulator showed.
That figure is nearly three times higher than during the pandemic, when 1,842 firms entered insolvency with pension arrears.
The pressure on businesses appears to be continuing, with outstanding pension contributions already reaching £30.6million during the 2025/26 financial year.
The growing number of corporate failures is now turning into real financial losses for households across the country.
While protection schemes exist to support affected workers, not all losses can be fully recovered, meaning some employees could end up with smaller pension pots than expected.
The findings emerge amid ongoing debate about the resilience of retirement incomes in Britain.
The scale of the problem has worsened dramatically over recent years, with the value of outstanding pension contributions climbing by 359 per cent since 2020.
Back then, unpaid contributions stood at £7.1million when employers entered insolvency, compared to £32.6 million last year.
The 2025/26 financial year already recorded £30.6 million in outstanding pension contributions
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LIQUIATIONCENTRE
The figures were requested following a wave of major business collapses, including the failure of the Arcadia Group, the former owner of Topshop, Dorothy Perkins, Burton and Miss Selfridge.
The retail giant entered administration in 2020 with a pension deficit of £510million.
Since 2020, nearly 23,000 employers have entered insolvency while owing pension contributions, potentially affecting well over 100,000 workers.
The situation shows no signs of improving, with experts forecasting that unpaid pension contributions could reach £40.2million in the current financial year.
Around 5,730 employers may file for insolvency while in pension arrears during 2026/27, the figures show.
Britons aged 65 to 74 hold average pension pots of roughly £145,900, meaning a 10 per cent cut could cost around £14,590
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This would represent a 31.1 per cent jump in the value of unpaid contributions compared to the previous year, marking the steepest annual rise since 2022/23.
The 2025/26 financial year already recorded £30.6 million in outstanding pension contributions, with 4,486 employers entering insolvency with pension debts as of January 2026.
Between 2021 and 2022, insolvencies involving pension arrears surged by nearly 77 per cent, likely driven by businesses struggling to repay COVID-era borrowing schemes.
Richard Hunt, Director at Liquidation Centre, urged workers to take steps to protect their retirement savings. He said: “To get ahead of any issues with your retirement savings, we urge all UK employees to review and understand their pension type, as this can change their protection if things do go wrong.
He warned that protection levels can vary depending on the pension scheme involved if an employer collapses.
Since 2020, 22,930 employers entered insolvency with outstanding pension contributions
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LIQUIATIONCENTRE
Mr Hunt said: “If you have a defined benefit pension, your contributions are protected by the Pension Protection Fund (PPF). Defined contribution pensions, on the other hand, are protected by the Financial Services Compensation Scheme (FSCS).”
He added that defined benefit pensions can still face reductions, as the PPF generally pays around 90 per cent of promised benefits.
According to Office for National Statistics figures, Britons aged between 65 and 74 have an average pension pot of roughly £145,900, meaning a 10 per cent reduction could amount to around £14,590.
Mr Hunt also advised employees to compare their payslips against pension provider statements to check contributions are being paid on time.
“If you notice anything unusual, contact your pension provider and make a report to The Pensions Regulator,” he said.