ONS: Drop in pension contributions since 2007

Tuesday, April 13th 2010

Pension contributions have dropped since the recession began, it has been revealed.

Total contributions to private pension schemes were at £86 billion in 2007 and fell to £82 billion a year later, the figures from the Office for National Statistics (ONS) revealed.

It is thought a drop in employer contributions led this fall, as they decreased to £33 billion in 2008 from £37 billion the following year.

Anna Sofat, director of ADDIDI Wealth - a financial planning and wealth management firm - explained it is about more than simply the recession.

"It's actually the closure of defined benefit schemes and the move to defined contribution scheme which has been responsible for much of the fall in contributions during this period," she claimed.

And many savers have lost confidence because they have seen a drop in the value of their pension.

Ms Sofat added that the industry must now look at ways to "make pensions attractive again".

The ONS noted that employers do not have to make contributions to group personal pensions or stakeholder pension schemes.