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ONS: Private sector pension contributions hit all-time low

DWP Work and Pensions 200

The number of private sector employees contributing to a workplace pension scheme has hit an all-time low, official figures show.

The Office for National Statistics’ annual Occupational Pension Schemes Survey shows 2.9 million people contributed to workplace schemes in 2011 compared with three million in 2010.

It is the lowest level since the survey began in 1953 and comes on the eve of the introduction of auto-enrolment in October.

In the last 10 years, the total number of employees contributing to private sector schemes has nearly halved from 5.7 million in 2000.

The report says: “The decline in numbers of active members in the private sector over the last 10 years reflects the fall in active membership of private sector defined-benefit schemes. Active membership of such schemes fell to an estimated 1.9 million in 2011 from 4.6 million in 2000.”

In total, 8.2 million people contributed to workplace schemes in 2011, with 5.3 million in the public sector.

Some 9.8 million people have stopped paying contributions but have preserved entitlements and 9.2 million receive pension payments.

For private sector defined-benefit schemes, the average contribution rate was 4.9 per cent for employees and 14.2 per cent for employers in 2011. This is down from 5.1 per cent and 15.8 per cent respectively in 2010.

For private sector defined-contribution schemes, the average contribution rate was 2.8 per cent for employees and 6.6 per cent for employers in 2011. This is up from 2.7 per cent and 6.2 per cent respectively in 2010.

Affluent Financial Planning managing director Carl Melvin says: “It is no surprise to see the fall in private defined benefit schemes. Private sector companies, other than large firms, are finding them too expensive with too much risk.”

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