The Office of National Statistics (ONS) have published figures showing that only 33% of British workers are saving into any kind of pension scheme. Only 28% of women are contributing toward a private pension scheme, and the number of men with a scheme is only slightly higher at 39%.
In 2002 the much larger figure of 41% of women and 52% of men put savings into private pension plans. The change is thought to be related to the end of private sector final salary schemes, which many employers got rid of after Gordon Brown introduced measures that meant the funds would be taxed.
The economic recession and the plummet of the stocks and shares market are also factors towards this drop in savers. People are much less willing to risk investing their money when markets are so unstable.
If the figures do not improve then millions will be living with insufficient funds when retirement rolls around.
At the moment the average amount of money saved into a pension scheme by a worker about to retire is just below £152,000. The ONS’s figures suggest that a pensioner with this amount saved would only receive £6,000 a year on retirement.
Public sector still saving
The contrast between the amounts being saved by private sector workers and public sector workers is shown by the study to be quite sizeable. In the public sector just as many people are saving for their pensions as before the slump. In the public sector twice as many men and three times as many women are saving for their pensions than in the private sector.
Samir El-Alami of PensionCalculator.org said: “”These figures are very worrying indeed. People are in the position where they feel they cannot afford to contribute to a pension, they do not believe a pension is the safest way to invest their money, or a combination of the two. The stark truth of the matter is however, that if people do not save for their retirement, all they will have is a very small state pension to rely upon, and who knows what the government will push the state pension age up to in years to come.”