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Release: Pension Trends, Chapter 8: Pension contributions, 2013 edition

Released: 16 July 2013

Contact

David Knight

Pensions Analysis Unit

pensionsanalysis@ons.gsi.gov.uk

Telephone: +44 (0) 1633 455633

Categories: Economy, Personal Finances, Pensions, Occupational and personal pensions

Frequency of release: Ad-hoc

Language: English

Geographical coverage: UK

Geographical breakdown: UK

  • In 2011, according to results from the Occupational Pension Schemes Survey (OPSS), the average employee in a private sector Defined Benefit (DB) scheme contributed 4.9% of salary. For Defined Contribution (DC) schemes, the average employee contribution rate was 2.8%. The average contribution rate for members in private sector DB schemes, having increased from 2000 to 2009, fell in 2010 and fell again, by slightly more, in 2011. For DC schemes; there has been little change in member contribution rates.
  • Between 2011 and 2012, many public sector pension schemes made changes to their employee contribution rates as a result of recommendations outlined in the 2011 report of the Independent Public Service Pensions Commission. In 2011, 11% of employees were paying contribution rates of ‘7% and over’. In 2012, this had increased to 37% paying ‘7% and over’.
  • The total number of individuals making contributions to personal pensions (group and individual) in 2010/11 was estimated by HMRC to be 5.7 million. There were fewer people contributing than in previous years but the average contribution per person was higher (£3,260 in 2010/11). Employer contributions have seen increases in most years, reaching a UK total of £9.1 billion in 2011/12 compared with £0.5 billion in 1990/91. Individuals’ contributions rose from £1.5 billion in 1990/91 to £10.2 billion in 2007/08, but then fell during the recession to £7.7 billion in 2010/11. By 2011/12 they had recovered to reach £8.8 billion.

  • The workplace pension reforms introduced in the Pensions Act 2008 started to be implemented with effect from October 2012 and are being phased in over the period to 2018. These reforms include the introduction of minimum contribution rates. The analysis published in this release relates to data collected prior to October 2012, before the reforms took effect.

Pension Trends provides a statistical backdrop for the debate on pensions. It looks at changes in pension provision over time in the context of social and economic developments and changes in the policy environment.

These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

Content from the Office for National Statistics.
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