18th December 2015
A quarter of households in Great Britain have no private pension wealth, the latest figures from the Office of National Statistics (ONS) show.
The findings highlight the disparity among pension savings, between the haves and the have-nots, men and women, and those working in the public sector versus those working in the private sector.
The figures reveal that between July 2012 and June 2014 only 35% of adults aged 16 and over contributed to a private pension. Just 32% of women made a contribution, compared to 37% of men.
Over the same period a much higher proportion of employees in the public sector – 84% with a median wealth of £61,600 – belonged to an occupational pension scheme than those in the private sector – just 42% with a median wealth of £24,000.
The amount of money saved in private pensions that had not been drawn from was also much higher in defined benefit (DB) pensions at £63,400 that for those in defined contribution (DC) pensions at £15,000.
For those drawing down their pension income, the median wealth held in pensions was £116,300 and a higher proportion of men than women – 22% versus 17% – receive income. The median level of wealth held by men was far higher at £162,400 compared to women at £73,900.
The fact that 24% of all households have no saving but private pension wealth in Britain increased from £3.5 trillion in the period July 2010 to June 2012 to £4.5 trillion, shows that the wealthier are getting wealthier and the poor are missing out.
In July 2012 to June 2014, of those who had any private pension wealth, the 10% of households with the higher total pension wealth held almost half of all the pension wealth in the country.
Malcolm McLean, retirement expert at Barnett Waddingham, said the figures ‘reinforce many of the perceptions of pension ownership and saving that already exist’.
‘They show that there is still a large imbalance between different sections of the population. Although there appears to be some improvement in women’s pension provision, they still fall below men in terms of the percentage saving being made,’ he said.
‘It is also clear that the public sector enjoy much better pension provision than the private sector.’
McLean also pointed to the figures that state ‘those who had any private pension wealth, the 10% of households with the highest total pension wealth had almost half of the all pension wealth in Great Britain (47%). This was almost six times the total private pension wealth of the 50% of households that had the lowest (8%)’.
‘This confirms the need for auto-enrolment which was introduced primarily to improve pensions saving for lower earners, and hopefully will encourage and promote pension provision for those who previously would not have reaped the benefits of it,’ said McLean, adding that auto-enrolment contributions need to rise.
‘We are currently in a better position in this country than we have been in the past, however there is still a long way to go before we can feel satisfied that the majority of the population are making proper provision and will be able to acquire financial security for themselves in later life,’ he said.