Analysis from leading independent financial services consultancy Broadstone shows that eligible private sector employees contributed record high amounts into their workplace pensions in 2024.
The findings, based on data from the Department for Work and Pensions annual ‘Workplace pension participation and savings trends of eligible employees’ survey1 showed that employees contributed a record £25.5 billion into their pots.
This marks a small uptick from the most recent high of £25.3 billion in 2019 before employees cut pension savings due to heightened uncertainty during the pandemic and cost of living crisis.
The growth represents the rising numbers of eligible employees with defined contribution pensions alongside data improvements incorporating a greater number of higher earners in the statistics.
As well as record employee contributions, workers also benefitted from an all-time high £10.8 billion of pension tax relief. This figure will be particularly scrutinised ahead of the Autumn Budget with the Chancellor allegedly looking at further tax-cutting measures.
Employers contributed a total of £46.4 billion in 2024, taking total annual pension savings for eligible private sector employees to £82.8 billion, slightly down on 2019’s record of £83.6 billion due to lower employer payments.
However, in a cautionary sign, median pension contributions from these employees have remained relatively stagnant at £3,230 a year – a figure that has not moved much in the past four years and remains down on the £3,390 registered in 2019.
Richard Sweetman, Senior DC Consultant at Broadstone, commented: "While it is great that the aggregate value of employee contributions has risen to record levels, this is primarily driven by rising numbers of workplace pension savers. It is alarming that median contributions have not really moved much of late in a trend that is unlikely to escape the gaze of the newly-formed Pensions Commission which is charged with improving pension adequacy in the UK.
“As the Chancellor examines her available options at the Autumn Budget for raising revenue, the record value of pensions tax relief for private sector employees will also be noted with interest. Small, incremental increases in contributions can have a big impact over a working life, particularly when combined with strong investment performance and low fees. Savers should review their pension regularly to ensure their money is working hard, and consider how their total retirement income, including the State Pension, measures up against the lifestyle they want. From there, they can adjust their contributions to help close any gap.”
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