30th October 2014
Membership of occupational pensions schemes soared to 8.3m in 2013, the highest level since 1953, reversing an almost continuous decline between 1967 and 2012 accordng to official numbers.
The Office for National Statistics (ONS) latest Pension Trends report also found that the gap in membership between men and women is decreasing from nearly 20 percentage points in 1996/97 to 3 percentage points in 2012/13.
Commenting on the latest ONS findings, Malcolm McLean, senior consultant at Barnett Waddingham, said: “This confirms without doubt the value of automatic enrolment and it’s across the board effect in stimulating and encouraging private pension saving to a much higher extent than expected – in numbers at least if not so much yet in terms of the level of contributions being made.”
The ONS data highlighted the continuing decline in defined benefit, or gold plated final salary schemes, in the period between 1997 and 2013 whilst over the same timescale membership of group personal pensions and stakeholder pensions has increased twelvefold.
“It is also interesting, though not surprising, to note the employee membership of a workplace pension is lowest at the beginning of working life and that certain public sector jobs were most likely – over 90% – to attract membership of workplace pension schemes whilst the reverse was true in other probably low paid jobs in the accommodation and food industries where both men and women were least likely to be members),” added McLean.
The one piece of really bad news in this overall uplifting set of statistics is the fact the percentage of self-employed men belonging to a personal pension fell from 37% in 2005/06 to 25% in 2009/10, falling further to 22% in 2012/13. This continuing downward trend in pension saving by the self-employed is, or should be, a matter of concern asserted McLean especially as the numbers of people opting to work for themselves appear to be on the increase.
He said: “This decline could be slowed down or even possibly reversed if the government were to offer further tax incentives for self-employed workers to join the auto-enrolment programme or find some other way of making savings provision for their old age.”