Number paying into a pension slumps to its lowest level since 1950s - NAPF Comment | Pensions and Lifetime Savings Association

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Number paying into a pension slumps to its lowest level since 1950s - NAPF Comment

27 October 2011

The National Association of Pension Funds (NAPF) today (Thurs) commented on new Government figures showing that the number of people paying into an occupational pension has fallen to its lowest level since the mid 1950s.

In 2010 there were 8.3m people saving into an occupational pension (3m private sector, 5.3m public sector). This is the lowest since 1956 (8m). In 2009 the total figure was 8.7m (3.3m private, 5.4 public).

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.

“The exodus is especially noticeable in the private sector, where confidence in pensions is running at a record low. People are being put off by stock market turmoil, falling annuities, and mistrust of the pensions industry’s fees and charges.

“While it’s understandable that spending gets prioritised during difficult times, it’s essential that people don’t forget about their retirement. The UK is on a collision course with its own old age. People are living almost a decade longer than they were in the mid 1950s, but they simply are not saving enough for their old age. Those who quit their pensions could be storing up cash problems for later in life.

“Landmark reforms to auto-enrol all workers into a pension from next year will make a big difference. Five to nine million people are set to save into a pension for the first time, or to save more. This is a huge opportunity to get the UK back on the right track, and the Government needs to do all it can to help ensure these reforms are a success. It mustn’t delay these reforms, or exclude smaller businesses from them. It also needs to explain the benefits of a pension, and to bolster trust and confidence in the system.”

The figures were published today in the latest Occupational Pension Schemes Survey by the Office of National Statistics.

Notes to editors:

1. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,200 pension schemes with some 15 million members and assets of around £800 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.

Contacts:

Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683. [email protected]

Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]