Pensions - Articles - First time that employees pay more into DC pensions than DB


Comment from Steven Cameron, Pensions Director at Aegon, on the release from ONS on investment by insurance companies, pension funds and trust

 Latest ONS data shows 2018 as the first year employees pay more into Defined Contribution (DC) than Defined Benefit (DB) Schemes

 The latest data from ONS shows that for the first time, employee contributions into DC pension schemes have overtaken those into DB schemes. 5 years ago in 2013, employees were paying £3.6bn into DB pensions and less than £0.5bn into DC. In 2017, employee DB contributions were £3.369bn compared to £1.387bn into DC. In 2018, employee contributions into DB pensions fell slightly to £3.216bn while employee contributions to DC had rocketed to £4.073bn, overtaking DB for the first time.

 While employees are now paying more into DC than DB, employers continue to be paying more into DB. Even ignoring any special contributions to address funding shortfalls, employers are paying £17.621bn into DB. This compares to £11.621bn into DC into 2018, although this is more than double the £5.34bn paid by employers into DC in 2017.

 The figures cover ‘self-administered schemes’ which include master trusts but not GPPs offered by insurance companies, so underestimate the total being paid into DC schemes.

 Steven Cameron, Pensions Director at Aegon comments: “The latest figures from ONS show the meteoric rise in DC pensions, fuelled by automatic enrolment and the huge growth in master trusts. In 2018 for the first time, employee contributions to DC outstripped those into DB pensions. Employers are still paying more into DB than into DC, although with the continued decline in DB in the private sector and with auto enrolment minimum contributions from employers rising from 2% to 3% from April 2019, we may in 2020 see DC overtake DB for employer contributions too.”

Back to Index


Similar News to this Story

Businesses want extension of auto enrolment to more workers
Employers support the targeted extension of automatic enrolment to more workers. 74% of businesses want to see it made available to the self-employed
TPR issue single code of practice statement
As part of becoming clearer, quicker and tougher we intend to make changes to our existing codes of practice. These changes will ensure that we are se
No such thing as a typical drawdown customer
According to research from Royal London income drawdown customers are taking full advantage of pension freedoms to take their income in a variety of w

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.