Personal pension savings fall in 2016/17

According to the Office for National Statistics, average annual contribution rates to personal pensions fell from £3,690 in 2011/12 to £2,400 2016/17.

The majority of individuals in the study were employees, who contributed an average of £2,310 a year in 2016/17.

Mutual insurer Royal London has warned that employees who stick to minimum auto-enrolment contributions could risk not having enough savings in retirement, and said the government should look at increasing the minimum rates.

Meanwhile, self-employed individuals made higher contributions on average at £4,490 in 2016/17, but this figure had fallen from £5,310 in the previous year.

Helen Morrissey, pensions specialist at Royal London, said: “This morning’s statistics show that while increases in life expectancy at age 90 have stalled, the number of people aged over 90 has continued to grow. Such a trend has big implications across the board for pensions and retirement planning. In the workplace sponsors of defined benefit pension plans will need to take this into account when funding their pensions over the long term. Meanwhile individuals will have to make sure they have adequate funds to sustain them over ever longer retirements. This may also include the need to think about how to meet the increasingly likely chance of facing long-term care costs later in life.”

“We would urge government to do all it can to help self-employed people build a sustainable pension by bringing into the auto-enrolment space without delay.”