A new study from the Department for Work and Pensions (DWP) has found that only 38% of people are contributing to a private pension arrangement.
This has fallen sharply from the over 50% of men who were contributing to pensions in 1999/2000. This is compared to only 39% today.
The current contribution levels represent the lowest level of pension participation in the last decade.
It is a worrying set of figures.
With life expectancy continually improving, saving for a financially secure retirement is becoming increasingly important.
The major decline in private sector defined benefit pension schemes suggests that more people should be making greater private provision for retirement.
Commenting today for Morningstar, Informed Choice chartered financial planner Martin Bamford said there could be several reasons for this declining popularity in pensions:
“With personal, private pensions, it takes a great deal of planning and motivation to open a pension plan,” he says.
“It’s difficult to know what to do, where to go, where to invest and how much to contribute. This prevents people from taking action.”
Making private pension contribution is unfortunately not as simple as it could be.
A good starting point is to understand where you are today and where you want to be in retirement. These are the two figures required before you can calculate how much you will need to contribute during your working life to create a large enough pension fund.
Seeking advice from an independent financial adviser can help you to answer these important questions.
Photo credit: Flickr/artisrams
