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09

ONS: fall in active UK pension members continues

Open-access content Friday 27th September 2013 — updated 5.13pm, Wednesday 29th April 2020

The number of people actively paying into UK occupational pension schemes fell by around 400,000 last year, continuing a declining trend, according to the Office for National Statistics.

In its annual Occupational Pension Schemes Survey, published yesterday, the ONS found there was a total of 27.6 million occupational scheme members, of whom 7.8 million were actively contributing, 9.5 million receiving pension payments while the remaining 10.2 million had preserved pension entitlements.

The number of active members was down on 2011 when 8.2 million people were paying in to schemes. Back in 1967 the number of active members totalled 12.2 million.

Of the 7.8 million active members, 5.1 million were in public sector schemes, while 2.7 million were in private sector schemes.

Commenting on the figures, Malcolm McLean of actuarial consultants Barnett Waddingham said they indicated a 'growing imbalance' between the number of people paying into schemes and those drawing pensions or with retained rights.

'This will continue to put pressure on sponsoring employers' ability to adequately fund their schemes and could lead to them seeking cheaper alternatives going forward,' he said.

McLean added that the gap between public and private sector pension provision remained 'disappointingly large', although something that could be helped by auto-enrolment, which was launched a year ago.

'The contrast between the two sectors should not be used to justify draconian measures to deplete provision in the public sector, but instead to take all necessary steps to encourage and sustain more meaningful pensions in the private sector. 

'A race to the bottom will not help anyone and will certainly not be in the best interests of our ageing population, nor in the future best interests of the country.'

For private sector defined benefit schemes, the average contribution rate in 2012 was 4.9% for employees and 15.2% for employers, the ONS found. For private sector defined contribution schemes, average contribution rates were 3.1% for employees and 6.6% for employers.


This article appeared in our September 2013 issue of The Actuary .
Click here to view this issue

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