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According to a new survey conducted by PriceWaterhouseCoopers (PwC) of 157 firms, all signs suggest that employers plan to radically reduce future pension provision, with 96 per cent who are planning changes.

For example, of the 17 per cent of companies that still offer defined benefit (DB) pensions to new employees, only a quarter (27 per cent) intend to retain this option.

The research found that 16 per cent of companies had already frozen future benefits accrual for existing members and of the remainder who have not frozen benefits, only a quarter (26 per cent) intend to definitely continue future accruals.

Meanwhile, 42 per cent intend to freeze accruals for all employees and a further 32 per cent are undecided.

As a result, only around 5 per cent of respondents expected to have a DB pension open for new employees in five years time and only 22 per cent are committed to maintaining future benefit accrual for existing scheme members.

This shake-up in DB pension provision is now being extended to defined contribution (DC) offerings, as companies re-evaluate the role that pensions play in overall employee reward and business strategy.

Marc Hommel, partner and UK pensions leader at PwC, said: "Our research shows fewer than one in 20 employers expect their defined benefit pension scheme to be open to new members in five years' time.

"Further, only about one in five are saying they will not freeze future benefit accrual for existing members, potentially leaving UK businesses with a legacy of 'zombie' pension funds.

"The collapse of future service defined benefit provision is occurring against a backdrop of super-protection for benefits already earned.

"Future generations will have to do far more for themselves relative to those people who have been lucky enough to belong to a fast-disappearing, defined benefit scheme.

"Pensions apartheid is upon us, with a growing gap between the relative generosity of the public sector and the intention of more than a third of private sector employers to provide the bare minimum under the 2012 auto-enrolment pension requirements."