Pension contributions start to rise again

Almost one in five workers has increased the amount they pay into their pension compared to last year.

In spite of people’s rising concerns about finance during the recession, new research from Aon Consulting has found that people are nearly four times as likely to have increased their contributions to their defined contribution (DC) pension than to have decreased them.

The results are the latest from Aon’s Employee Omnibus Survey and the findings suggest that at a time when some employers are cutting back their pension provision, a significant slice of the workforce is picking up this shortfall by increasing personal payments. The research indicates that many regard sufficient saving for their pension as a necessity despite the recession.

Of the 18 per cent who have increased payments, only 2 per cent have done so by under £10 per month and this may be due to automatic links to salary increases. However, 9 per cent have boosted payments by more than £50 per month in the last year and this includes 2 per cent of workers who have increased contributions by more than £200 per month despite the current economic conditions.

Meanwhile, 42 per cent stated that they had made no alterations to the amount of money they have paid into their pension over the past year. Only 5 per cent said they have decreased contributions in the last year.

Helen Dowsey, at Aon Consulting said: “These findings are encouraging news as they show that for a significant number of people, saving for a pension is sacrosanct despite the recession.

“With some employers less able to contribute as generously as in the past, many individuals have taken it upon themselves to make up the shortfall. Aon would encourage all employees to carefully consider the amount they pay into their pensions and review this on a regular basis.”