8 Oct 2019
Brits Increase Pension Contributions
Recent Department for Work & Pensions statistics illustrate Brits are getting back into the habit of saving towards their financial future and funding their pensions.
In 2018, £90.4 billion was saved by eligible employees into pensions, an increase of £7.0 billion on the amount saved in 2017. Auto-enrolment has played a significant part in this since auto-enrolment became legislation in 2012.
Key trends in workplace pension participation include:
Since 2012 private sector participation has risen 43% to 85% of private sector eligible employees participating in a work place pension scheme. Public sector pension participation remains high at 93%; an increase of 5% since 2012.
In 2018 workplace pension participation was highest in public administration, education and health, and lowest in construction with 79% participating. Agriculture and Fishing have seen the largest increase rising by over 60% since 2012.
By gender and whether you work in full-time or part-time, there are high levels of participation in the public sector. Levels of participation differs between men and women in the private sector by about 5%, and there is greater difference between full-time and part-time workers in the private sector.
The largest increases in participation have been seen amongst eligible employees in the lowest age groups. This is mainly driven by increasing participation in the private sector. Pension participation in the public sector is relatively stable, although for those aged between 22 and 29, 90% of eligible employees participated in a work place pension in 2018.
Overall in 2018, contributions by employees accounted for 26% of retirement saving, 64% by employers, and income tax relief for the remaining 10%
When planning for your retirement, it's always useful to start as early as you possibly can. Having a plan, creating a budget, consulting a professional and reviewing frequently, are positive steps to provide you a greater opportunity of retiring when you want to, with an income you are confident will provide you an income for life without the fear of running out of money.
Pensions are an obvious tax wrapper because of the generous tax breaks available but, alongside your pension fund, you may wish to consider using other tax wrappers such as ISAs to supplement your income in retirement, and provide you greater access flexibility.