26th February 2016
The total saved into personal pensions is nearing its pre-financial crisis peak.
Data from HM Revenue & Customs shows £20.3 billion was contributed to personal pensions in the 2014/15 tax year, up from £18.4 billion the year before.
Contributions are now nearing their peak of £20.9 billion which was contributed in the 2007/08 tax year ahead of the financial crisis.
Auto-enrolment, which was introduced in 2012, has helped the total saved increased and when the roll-out is finished in 2017 the government hopes to have an extra nine million people saving into pensions for the first time.
They will also be saving more as the auto-enrolment contributions are pushed up to 8% of salary, made up by 4% employee contribution, 3% employer contribution and 1% tax relief.
Vince Smith-Hughes, pension expert at Prudential, said: ‘Closing the pension provision gap remains a huge challenge but these stats show that UK savers are slowly but not so surely getting there.
‘While the total number of people contributing to a pension scheme is up, the nominal average contribution per person has continued to fall. As more employees are auto enrolled and the contributions increase, we would hope to see both the number of pension savers and the total amount of pension savings increase.’