Undersaving Britain – pension saving at the lowest level in 10 years
- Published on Tuesday, 03 January 2012 10:01
- Posted by Scott Buckler
Only 38% of working-age people - 11.6 million out of 30.4 million people - are saving into a private pension, the lowest level in the past ten years, new analysis by the Department for Work and Pensions showed
This highlights exactly why automatic enrolment – introduced from October 2012 – is so critical.
The figures show a steady decline in pension saving between 1999/2000 and 2009/10, with the decrease being most dramatic among men and the under 40s.
While the overall number of people saving into a private pension fell from 46% in 1999/00 to 38% in 2009/10, pension saving among men fell from 52% to 39%. And among people aged between 20 and 39 years old pension provision fell from 43% to 31%.
Minister for Pensions Steve Webb said:
"These are alarming figures and they underscore exactly why our pension reforms will be so vital. With fewer people saving into a pension, lower annuity rates and an average of 23 years in retirement, many people could face a poorer future in their later lives.
"We simply must put a stop to this trend and get people saving. Automatic enrolment, beginning for the largest employers later this year, will get millions of people saving, many for the first time."
The analysis also reveals a map of pension provision across the UK in 2009/10, with higher pension provision in the South East (43%), Scotland (42%), the South West (41%) and the East (41%), and lowest pension participation in Northern Ireland (33%), London (34%) and West Midlands (34%).
The Family Resources Survey (FRS) is a key source for pension information and between April 2009 and March 2010, interviewed around 25,000 private households across the UK.