The Office for National Statistics (ONS) found that there were 28.53 million people in the UK not actively saving into a private pension between April 2016 and March 2018, according to the latest available figures.
The government department’s Wealth and Assets Survey also revealed there were more women (15.36 million) not saving for their retirement compared to men (13.17 million) during the period.
Stats show there were 1.82 million people with a personal pension and just over 1.7 million who have more than one type of private pension.
Decade rise for pension wealth
The ONS said total private pension wealth in the UK was £6.1trn ($8trn, €7.2trn) in the April 2016 to March 2018 period, up from £3.6trn in July 2006 to June 2008, after adjusting for inflation.
This now represents 42% (previously 34%) of the nation’s total wealth.
During the two-year period, nearly half (48%) of all private pension wealth was held in pensions in payment, 37% in active pensions and 15% in preserved pensions; these proportions have been stable over time.
The percentage of adults below the State Pension age actively contributing to a private pension has increased to 53% in April 2016 to March 2018 from 43% in July 2010 to June 2012.
This rise reflects increased participation in defined contribution schemes, likely to be a result of the introduction of automatic enrolment between 2012 and 2018.
Auto enrolment success
“Pension wealth is on the up, a tribute to the success of auto-enrolment, but also an acknowledgement of the increasing years that people’s pension pots will have to fund,” said Shona Lowe, private client and corporate director at 1825, the financial planning arm of Standard Life.
Emma Byron, managing director at Legal & General Retail Retirement Income, added: “Pension wealth in Britain is rising, but that growth is largely down to the triumph of auto-enrolment.
“Millions of people are now contributing to workplace pension schemes to save for their retirement. However, the challenge still facing retirees is how to make sure their pension pots can last 20 or even 30 years.
“As an industry, we need to make retirement planning more accessible and relatable to customers.”
Steven Cameron, pensions director at Aegon, said: “The latest wealth figures from the ONS show just how significant private pensions whether in workplace schemes or individual arrangements are to the nation’s wealth.
“These figures confirm that private pensions are becoming even more vitally important to the wealth of the nation and each and every one of us should be taking a keen interest in this aspect of our wealth.”
Gender differences
Around 20.6 million people had a private pension, which works out to roughly 10.8 million men and 9.8 million women.
During the 2016-2018 period, just over 9.1 million had defined benefit (DB) pensions, while just under eight million had defined contribution (DC) schemes.
More women were part of DC schemes compared to men, who made up most of the DB scheme holders.
Men also had higher (£25,300) median active pension wealth than women (£20,000).
For those aged 65 years and over, the median retirement pot for pensions in payment for men was double that for women.
Yawning chasm of gender inequality
Helen Morrissey, pension specialist at Royal London, said that the rise in pension wealth does not show real problems.
“Scratch below the surface and you will see there is still much work to do to address the yawning chasm of gender inequality, with more men continuing to save into a pension and the median amount saved being higher.
“Many women face unique challenges in saving for their retirement as they spend time out of the workforce caring for children and often only return to work on a part time basis.
“Industry and government needs to look at ways women can navigate these challenges and build a strong foundation for the future.”
