The Office for National Statistics (ONS) regularly examines pension provision in the UK and its data clearly influences government pension policy. Last month the ONS published three revised chapters of its Pension Trends analysis. The underlying research pre-dates the start of auto-enrolment last October and, to some degree, underlines why the government introduced this form of quasi-compulsion to pension provision:
- In 2011 the number of employees accruing pension benefits in occupational pension schemes was 8.2 million, its lowest level since the 1950s. Nearly two thirds of those employees were in the public sector.
- 56% of the employees in private sector final salary schemes were in schemes closed to new entrants.
- 46% of employees were working members of workplace pension schemes in 2012 – the lowest level since these records began in 1997 (at 55%).
- In 2011, 46% of self-employed men had never belonged to a personal pension – the highest level of non-membership since the ONS started collecting data in 1991/92. Just 34% self-employed men belonged to a personal pension in 2011, almost exactly half the proportion recorded in 1991/92.
The decline in private pension provision is hardly news, but the extent of it is a concern. The government’s pension initiatives – auto-enrolment and the new single-tier state pension – are a start, but they are unlikely to be sufficient. The provision you make yourself, whether through additional pension contributions or other retirement savings, will remain an important factor in determining how comfortable your retirement will be.