Pensions vitally important to the wealth of the nation
8 December 2019
The latest ONS Pensions Wealth data reveals how important it is that as a nation we embrace and address the gaps in pensions provision, says Steven Cameron, pensions director at Aegon, comments on
The latest wealth figures from the ONS show just how significant private pensions whether in workplace schemes or individual arrangements are to the nation’s wealth. With a value of a huge £6.2 trillion, up from £3.6 trillion ten years ago, and now representing 42% of the nation’s overall wealth, it shows just how important private pensions are to us all.
A further positive trend shows the percentage of adults below state pension age actively contributing has increased from 43% to 53% over the last 10 years, boosted significantly by automatic enrolment, introduced for employees in 2012.
But that still leaves 47% or almost half of adults not contributing which is why any future Government needs to focus on more pensions support for the self-employed and lower earners, who are both outside of auto-enrolment.
However, there are big differences in where this wealth sits. Almost half (48%) is held in pensions which are already in payment, which will be mainly made up of people who have already retired. Many of today’s retirees will be benefitting from the golden age of generous defined benefit pensions which are very rarely available to today’s workers, particularly in the private sector.
The figures also demonstrate a continued gender pensions gap. More men than women below state pension age have an active private pension (56% compared to 51%) and the male average (median) pot is £25,300 compared to £20,000 for women.
However, there are signs of the gap reducing as for those over age 65, the average pension wealth for men is double that for women.
Overall, these figures confirm that private pensions are becoming even more vitally important to the wealth of the nation and each and every one of us should be taking a keen interest in this aspect of our wealth.
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