The days of free pensions for thousands of Norwich Union staff are coming to an end with parent company Aviva asking all its UK-based employees to start chipping into their own long-term savings pot.

The days of free pensions for thousands of Norwich Union staff are coming to an end with parent company Aviva asking all its UK-based employees to start chipping into their own long-term savings pot.

Nearly 16,000 staff in Aviva's money purchase scheme will be affected by the move, while 7,250 members of the group's final salary scheme will have to double their contributions if they want to maintain their existing benefits.

The news comes a fortnight after it emerged that Aviva's directors had asked for their basic salaries to be frozen this year.

The decision will bring to an end what is believed to be one of the last private-sector non-contributory schemes in the UK, with staff in Aviva's money purchase scheme needing to put aside at least 2pc of their salaries if they want the company to continue making provision for their retirement.

Details of the changes to the generous schemes emerged the day after the UK arm of fellow insurer Aon announced plans to cut the contributions it makes to its staff pension scheme by up to half. Analysts say the announcements by the insurance groups - which are major players in the pensions market - are alarming because they are often seen as leading the way on pensions policy.

Aviva was keen to point out that any workers in the money purchase scheme agreeing to save between 4pc and 8pc of their salaries would receive enhanced contributions from the company, meaning those staff would see increases to their overall remuneration packages.

But the 7,250 members of the company's final salary scheme have been told they will need to up their contributions from 5pc to 10pc if they want to safeguard their existing retirement packages.

Final salary schemes have come under increasing pressure in recent years, mainly thanks to the increase in life expectancy which means schemes generally have to support their members for longer in retirement.

Meanwhile, many employers have been forced to make cuts during the economic downturn, with pension contributions amongst the things that have been affected.

NU last night said the new arrangements would encourage a savings culture amongst its staff. As far as the money purchase scheme is concerned, the company pointed out that staff were not losing any money but were investing it for the future.

“It is important not to focus on the short term but to look at the long term,” a spokesman said.

He added that the company remained committed to keeping its final salary scheme open to its existing members.

Andy Case, national secretary of the Unite union, said: “We were involved in the consultation process and we said we opposed any erosion of pension rights.

“The other side of the coin is that it is still a scheme that is comparable to other schemes in the financial sector.”

The changes will be staggered over the next two years.