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Workplace pension saving falls to new low

Workplace pension savings has hit its lowest level since the 1950s.

 
Workplace pension saving falls to new low

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.

3 comments so far. Why not have your say?

Franco

Jul 17, 2012 at 19:58

We all know pensions were devised by the government and industry to ensure the pin striped "gentlemen" could live in the style to which they were accustomed. Every one has some one in his family who paid heavily into his company's pension scheme for 30 years only to finish up with £32.06 per month when he retired..

Yesterday we had news here of a Which? study which found rip off charges in the pension industry were reducing pension pots from £32,400 to £15,700 .

If you want people to take them up, stop the rip offs, guarantee a minimum decent return (at government cost) and let people do whatever they want with their money after they retire.

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Rose G

Jul 18, 2012 at 09:46

Why should people believe either the politicians, the media or the pensions industry?

We know we are being ripped off, now we also know it is not worth saving for an occupational pension, as they keep changing the goal posts.

I would not invest in a pension again, knowing how I will definitely be ripped off, time and again, during my working life, because politicians seem to think it is ok to keep changing the terms & conditions every time another lot replaces the current lot at westminster - you will notice however, the many changes both in private & public sector, does not affect the liars at westminster, their pensions are protected, and in anyway, they earn more than the rest of the ordinary working public, what with their expandible expenses claims.

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Michael Stevens

Jul 18, 2012 at 18:04

Michelle McGaph, you are incorrect in your statement about Personal Pensions.

Company or occupatuonal.pensions are a wast of time, as they are costly to run and can have a liabiity om the company. A group scheme of personal pensions is the way to go.

i have only advised companies to have a staff Personal Pension since 1988. The company pays in to the plan. Simple!

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