American Express, the global financial services company, has effectively cut the pay of its 6,000 UK staff by stopping payments to its stakeholder pension scheme.

It is the largest company to take such action and pensions experts fear that the decision could trigger a series of copycat announcements.

American Express had been paying between 3 per cent and 9 per cent of salary into its employees’ stakeholder pensions.

Employees had been contributing a minimum of 1 per cent and a maximum of more than 6 per cent.

The cut came into force on July 1 and is part of a cost-saving plan by the American credit card company.

Laith Khalaf, a pensions analyst with Hargreaves Lansdown, the independent financial adviser, said: “This is effectively a pay cut for all the employees in the pension scheme. There is a real possibility that, in the current cash-strapped environment, other companies may be tempted to follow suit.”

Pensions are a form of deferred pay, so any reduction in the contributions a company makes towards an employee’s pension is, in effect, a pay cut.

Mr Khalaf said: “This measure will leave a big hole in many American Express’s employees’ pension pots, especially in cases where they were receiving the maximum 9 per cent contribution from their employer. Someone earning £40,000 a year will lose an annual pension contribution of £3,600.”

American Express said that it would stop payments for a maximum of 18 months to January 1, 2011.

The Government has pledged legislation that is due in 2012 to make it illegal for companies to stop paying into their pension funds.

Staff at the American Express call centre in Brighton were unwilling to talk about the company’s halting of pension contributions.

The TUC said: “This is nothing more or less than a pay cut imposed on staff. This is what happens in non-union workplaces.”

American Express said: “This is just one of a series of cost-cutting measures.” The announcement is the latest in a series of blows to members company pension schemes in the UK.

In April the British subsidiary of Aon Corporation became the first UK-based company since the credit crunch to cut employer contributions to its money purchase scheme.

In the past year a number of well-known names have said that they were closing their final-salary schemes to new or existing members, including BP, Barclays and Wm Morrison.

Stakeholder pensions are low-cost pensions that can be either personal or company schemes.

Companies with more than five members of staff are required to offer them, although at present they are not obliged to make any contribution themselves.

However, the new laws taking effect from 2012 will require companies to make a minimum contribution of 3 per cent into an employee’s company pension.

The move by American Express has led to speculation that the Department for Work and Pensions may bring forward the date when this minimum contribution becomes compulsory.

The DWP said yesterday that it had no plans to do so.

American Express was the fastest-growing credit card company during the credit boom of 2003-07, but it has been hurt by rising delinquencies in the past two years.

Its net income for the first quarter of this year fell by 56 per cent and the amount set aside for credit losses increased by 49 per cent.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive