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Pension numbers fall again

Pension numbers fall again

Category: Pensions

Updated: 22/11/2011
First Published: 27/10/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The number of people actively paying into a work pension has fallen again, and is at its lowest level for decades.

The Office for National Statistics (ONS) revealed that the number of people who paid into an occupational pension fell from 8.7 million to 8.3 million last year.

It is the lowest level of active pension membership since the 1950s.

Figures show that of the 8.3 million workers who paid into a pension last year, 5.3 million were in public sector schemes and three million in private sector schemes.

The fall in numbers has been blamed on the continuing trend of private firms closing final salary schemes.

Of 400,000 who stopped paying into a work pension, 300,000 came from the private sector, with just 100,000 from the public sector.

The number of people paying into a private sector pension has more than halved from the 1991 peak of 6.5 million members.

By contrast, the number of people paying into a public sector scheme is just marginally below the record level of 5.5 million that was recorded in 1979.

With the UK struggling to pay its debts and an ever-ageing population, the Government will see today's figures as a blow.

It is hoped that new rules that are to be phased in from next year will reverse the tide and dramatically increase the number of people paying into a company pension.

The scheme will mean that employers are automatically enrolled onto the state sponsored NEST scheme or a company plan.

Up to nine million people will be automatically enrolled onto a pension scheme, but the National Association of Pension Funds has warned that many people will opt-out.

Last week the body said that one in three people would choose to leave the pension they were entered into, meaning three million people could reject the chance to start building up a retirement nest egg.

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