Pensions - Articles - Aegon comment on the ONS Labour Market figures

Kate Smith, Head of Pensions at Aegon, comments on the ONS Labour Market figures

 “Today’s labour market figures come nearly a week after the Chancellor committed to focus on raising the wages for the low paid in his Spring Statement and paints a strong picture of the UK labour force. Annual wage growth for the three months to January has increase by 3.4% and total pay in real terms increased by 1.5%. This means pay has been outstripping inflation for over a year and gives individuals greater bandwidth to save any additional income for later life, this is timely given that auto-enrolment pension contributions are about to increase . Even a small amount saved today could have a significant impact on a retirement pot in the future.

 “The UK unemployment rate as a whole has been falling for the last five years and now stands at 3.9% for the three months to January, the lowest level for the same period since January 1975. The rise in the State Pension Age will have an influence on today’s figures and we can see that the 50 and 64 age bracket saw the largest increases in the number of people in employment. Many women who were relying on an earlier State Pension are now remaining in employment in order to plug the gap in income to State Pension Age and hopefully using this time to save into a workplace pension.

 “The number of those in part-time employment has been gradually increasing over the last half year and there are now 8.6 million part-time workers in the labour market. For part-time employees, retirement may seem daunting prospect and they may find themselves lagging behind in terms of their retirement savings. Many find themselves excluded from automatic enrolment as their earnings sit below the £10,000 a year earnings threshold and others find it challenging to make significant contributions with other pressures pulling on their finances. However, rather than shy away from engaging with their pensions, these individuals should take action now to set retirement goals and estimate what level of income they require, even if their pension may not feel like a priority.”

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