Pension savers rallied against the cost-of-living crisis by adding a third into their pension pots between July and September, a study finds.
The average contribution rose to £1,034 over the three-month period for PensionBee customers – an increase from £776 at the same point in 2022.
Despite a huge increase in pension payments from women, there was still a sizeable gender gap in how much was saved during the third quarter of this year.
Average contributions grew 44% for women, adding £861 into their accounts, while men were able to put 29% more than in 2022, but still with a higher average of £1,163.
There was a further divide when it came to those who are self-employed and other workers.
Self-employed workers were only able to add 16% more than they did in 2022, adding £1,085 to their funds. Whereas other workers, on average, grew their pots by 46% from £703 in the same period in 2022 to £1,026 in 2023.
Pension Bill could boost workers’ retirement kitty
The hike in contributions for many was due to a nationwide salary increase (67%), with pay growing by 7.7% from July to September 2023.
Over a fifth saw a bump in payments due to employees matching monthly auto-enrolment contributions.
Against a backdrop of rising food inflation, high mortgage costs, and the slew of financial struggles hitting households, some were still able to prioritise their retirement plans. Just under one in seven (16%) added more funds to their pension as saving for retirement became more of a priority.
Despite the positive rise in workers’ contribution, there are still factors including auto-enrolment for those aged under 22, plus the cover of care costs later in life, that would assist the nation financially in retirement. These reforms are anticipated to bepart of a much-discussed Pension Bill.
The potential changes were not addressed in the King’s Speech, but will reportedly be laid out in the Autumn Statement next week.
‘Generous employer matching’ helping workers build up funds
Becky O’Connor, director of public affairs at PensionBee, said: “This data suggests pensions are a financial priority for many people. Despite hard times, many savers earnestly want to boost their retirement prospects and are willing to follow through with action.
“Decisions to increase contributions appear to be more likely during times of personal good fortune, such as when someone receives a pay rise or because of generous employer matching.
“There is also evidence that greater understanding of the benefits of pensions can be motivating and somewhat counter-intuitively, the cost-of-living crisis appears to have encouraged some people to consider their future financial resilience and this has nudged them into increasing contributions.”
