Most over-50s have never increased pension contributions

More than half (62%) of over-50s who are still in work have never increased the amount they contribute to their pension, according to research by Friends Life.

Its Pension savings report, which surveyed 1,606 ovr 50s who have not yet retired, found that, of those who have made adjustments, 56% have only increased contributions by up to 5%.

Only a quarter (25%) of respondents felt that they contributed enough to their pension through their 20s, 30s and 40s to be able to afford a comfortable retirement. Almost half (40%) of respondents felt that they should have started saving earlier.

More than two-thirds (68%) of women have never proactively increased the percentage of their pension contributions, whereas half of men (53%) have never done so. A small proportion (12%) of over-50s planned to increase their contributions as they approach retirement by an average of 9%.

The research also found:

  • Over-50s in the East Midlands made the largest increases, with an average of 15% across their working life, against a national average of 8%.
  • Over-50s in East Anglia made the smallest increase in contributions with an average of 6%.
  • London, the north east, north west and West Midlands were all in line, with the national average of an 8% increase.

Colin Williams, managing director of corporate benefits at Friends Life, said: “Difficulty in finding money to start contributing to a pension earlier in working life is not a new problem.

“Auto-enrolment should help make this possible, by enabling more workers to start saving for the first time and easing the burden for those on lower incomes via a low starting rate for contributions.

“Our message to those who missed saving earlier in their careers is that there’s still time to make a difference. At 50-years-old many workers still have 15 or more years left to work, and increasing contribution levels at this age could make a significant impact on the size of their pension pot.

“Keeping track of pensions built up throughout their working career will also help workers understand their collective pension position, and using tools and forecasters they can make informed changes to their contributions to help increase their final pot size to better meet retirement needs.”