09 Sep 2020

How Pensions have grown

In 2010, 1.5 million people were members of Personal Pension Plans in the UK.

Today, a staggering 35 million people have a personal pension.

95% of those pension holders are invested in a ‘default investment fund’, where they have made no active choice on how their money was invested.

These figures are a sign of success in changing times. Employees who are no longer given the option of joining a defined benefit pension scheme, are joining their employer’s workplace pension scheme, so they are building up their own funds for future income when the employer is no longer taking on that liability.

However, the minimum pension contributions allowable to be paid into a workplace pension scheme will fall far short of what any employee will actually need to support themselves, and despite the huge increase in people with personal pensions, I suspect this is just one step in the staircase that will need to be climbed to ensure our working population can enjoy a comfortable retirement.