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Workplace pension saving falls to new low
Workplace pension savings has hit its lowest level since the 1950s.
The number of Britons saving into a private pension has fallen substantially, with just one in three private sector workers saving into their workplace schemes, figures from the Office for National Statistics (ONS) show.
There are two types of private pension, occupational pensions offered by employers and personal pensions that an individual takes out independently.
In 2010 there were 8.3 million active members of occupational pension schemes, the lowest level since the 1950s (the ONS doesn't have these figures for 2011).
Fewer than half of all full-time workers are now saving into a workplace pension, with 47% of female workers and 48% of male workers participating in schemes in 2011.
The decline of defined benefit (DB) pensions, which pay out a multiple of number of year worked and a proportion of final salary, in the private sector has meant membership of private DB schemes has fallen from a third of workers in 1997 to one in 10 workers in 2011. This is the first time the overall proportion of workers in occupational schemes, in both the private and public sector, has fallen below 50% since figures were first recorded in 1997.
The number of people contributing to a personal pension also fell from 6.4 million 2008/09 to 6 million in 2009/10.
Jamie Jenkins, head of workplace strategy at Standard Life, said the introduction of auto-enrolment in workplace pension schemes would increase the number of people saving for retirement.
‘This is why the introduction of auto-enrolment into company pension schemes is such an important opportunity to change the tide for consumers when it comes to pension savings. Few people would be comfortable living only on the state pension when they retire, which is why it is so important to save privately,’ he said.
The National Employment Savings Trust, the government-backed pension scheme, will bring 10 million people into pension savings from 1 October.
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