- Total annual savings for eligible savers increased to £105.9bn in 2020
- While a fall in pension contribution rates was recorded in the first half of 2020 this recovered in the second half of the year
- Gaps remain in coverage, notably the self-employed who have seen a long-term decline in participation from 21% in 2009/10 to 16% in 2019/20.
- Gaps across ethnic groups remain. For instance, Pakistani and Bangladeshi have significantly lower participation rates at 63% in comparison to an average of 83%
The DWP has issued Workplace Pension participation data – Workplace pension participation and savings trends of eligible employees: 2009 to 2020 – GOV.UK (www.gov.uk)
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:
“The evidence points to the enormous impact that auto-enrolment has had on the nation’s pension savings behaviour over the past decade. The participation of under-represented groups such as lower earners and younger age groups has been boosted massively. However, gaps clearly remain. The self-employed are out of scope and falling further behind and while the participation of Pakistani and Bangladeshi people has grown, they are still playing catch up.
While people were tempted to decrease, or even stop pension contributions in the early days of the pandemic it is positive to see this has not led to long term damage with employee contributions recovering towards the end of the year. There is always a concern that once contributions are reduced, or stopped, they are not taken up again which can damage people’s financial resilience in retirement – it is good to see contribution levels have remained resilient in the face of COVID.”