Total contributions to pension schemes fell from £20.9 billion in 2007/08 to £18.7 billion in 2009/10, largely due to a fall in the number of people contributing during the recession, according to figures by the Office for National Statistics (ONS).

ONS' report Pensions trends chapter eight: Pension contributions considers the following:

  • The level of contributions to private sector occupational pension schemes made by scheme members and their employers 

  • Employee contributions to public sector occupational pension schemes
  • Differences in contributions between different types of private sector occupational pension schemes – defined benefit (DB), defined contribution (DC) and by contracted-out status 

  • How the minimum employer contribution required from October 2017 under the 2012 pension reforms compares with current employer contributions to equivalent schemes
  • The ONS has also published Pension trends chapter six, which looks at private pensions. It examines differences between DB and DC pension schemes, and between provision in the public and private sectors.

    It found that:

    • In 2009, 56% of active members of private sector DB schemes were in schemes closed to new members, while most public sector workers can still join a DB scheme. 


    • In funded DB schemes the employer must pay out pension at an agreed rate, assuming all the risks, such as poor investment performance and rising life expectancy.

    • In DC pensions, individual members assume the investment risk and also face risks such as declining annuity rates.

    Darren Philp, director of policy at the National Association of Pension Funds (NAPF), said: “These trends reflect the current state of the economy and the impact this is having on UK households.

    “It is understandable that people have more pressing financial priorities during difficult times, but contributing to a pension regularly is vital to ensure a decent income in retirement.

    “The UK’s population is on a collision course with its own retirement. People are not saving enough and millions risk facing poverty in their old age.

    “The auto-enrolment reforms being introduced from next year are likely to result in five to nine million people starting to save into a pension or save more. This is a key opportunity to get the country saving for its old age.”

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