Occupational pension contributions fall to 54-year low

| October 29, 2011 | 3 Comments

According to a report by the Office for National Statistics (ONS), the number of people paying into an occupational pension has slumped to a level not seen since 1956.

Last year, there were 8.3 million people contributing to an occupational pension (3 million in the private sector and 5.3 million in the public sector).

This represented the lowest figure for 54 years when 8 million contributed to this type of scheme – down from a record high of just over 12 million in 1967.

According to the National Association of Pension Funds (NAPF), in the last decade, thousands of private sector final salary schemes have closed to new members, with less than one in five final salary schemes now open to both new and existing members.

Commenting on the report, Joanne Segars, NAPF Chief Executive, said: “It’s astonishing that pension uptake has slumped to such a low level, and with a greying population living longer and longer, it’s the last thing our society needs.

“Unemployment is partly to blame, but many who have a job are struggling with household finances and the rising cost of living. People are thinking about today and putting tomorrow on hold, and unfortunately saving into a pension is being seen as a luxury,” she added.

She explains that many are being put off by the turmoil in the stock markets, as well as falling confidence in the pensions industry’s fees and charges.

However, Ms Segars warns that those who opt to stop paying into their pensions could be in for cash problems for later in life.

The Association is urging the Government do all it can with regard to new pension reforms by explaining the benefits of a pension and at the same time boosting confidence within the system.

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Comments (3)

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  1. halfords says:

    when only those at the top are receiving inflation beating pay rises,
    when gas and electricity prices are increasing, with rents rising,
    with many jobs under threat,we dont need advice on the benefits of pensions we cant afford! even if you save now, into a fund (that a future gvmt may rob) look at the dropping annuity returns! look at the pathetic saving interest rates!. home,heat and eat,is the now priority.
    pensions seen as a luxury, they are a bloody luxury!.

  2. b harris says:

    It’s no wonder people aren’t putting money into pensions. The pensions industry has been completely discredited by recent events - basically stitching up hard working people and taking their cut regardless of performance. If you are lucky enough to be in a job it make sense to get a guaranteed return by paying down debt rather than getting next to zero for savings or putting your fate in the hands of the city spivs who created this situation in the first place.

  3. b harris says:

    Until we have a truly brave and visionary government which has the guts to tackle the long term issue of fair pensions for all, possibly at the expense of being re-elected, it is difficult to see people’s faith in pensions being restored.

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