Number of people paying into a pension hits 60-year low
Fewer people are saving into a company pension plan than at any point for the past 60 years, fuelling fears that millions of Britons will be forced to carry on working into their 70s.
Official figures today showed the number of people in an occupational pension scheme had plunged to 8.2 million or 35 per cent.
This compares with 12.2 million in 1967 and is the lowest recorded since 1953 the year of the Queen's coronation.
Experts blamed the collapse in final salary schemes, the plunge in savings rates and the huge pressure on parents to cut savings to find money to help make ends meet.
The number of men topping up their workplace pension with a private scheme has also plunged to 35 per cent, down from 54 per cent as recently as 1997. Just 32 per cent of women have a private plan.
Tom McPhail, pensions expert at Hargreaves Lansdown (LSE: HL.L - news) , said: "The inevitable consequence of this level of pension funding is that millions of people will have to work into their 70s because they won't be able to afford to retire earlier."
Robert Cochran, pensions expert at Scottish Widows added: "Today's figures emphasise that as a nation we are entering a perfect storm for pensions.
"Not only is the number of people in workplace pension schemes at its lowest level in 60 years, but recent research from Scottish Widows found that expectations for income in retirement are still increasing. To meet these aspirations, a 30 year old saver would need to save £12,000 a year, or £1,000 per month every year until retirement."
The pensions numbers released by the Office for National Statistics date back to Spring las year, before the start of auto-enrolment, where companies automatically sign staff up to pension schemes.
But almost half of non-savers eligible for automatic enrolment work for small employers who do not have to start enrolling staff until 2015 or later.
Joanne Segars, head of the National Association of Pension Funds, added: "These bleak figures show that pensions uptake was shrivelling at a seemingly unstoppable rate.
"The recent lack of appetite for a pension among private sector workers is particularly worrying. The patchy economy, weak annuity rates, and mistrust of the pension industry's fees and charges are all to blame."
David Robbins of Towers Watson warned: "Automatic enrolment should make low pension scheme membership yesterday's problem.
A survey last week claimed older Britons, largely unscathed by the credit crisis, were now feeling the pinch as investment income is hammered by record low interest rates.
A spokesman for the Department for Work & Pensions said: "For too long, saving into a private pension has been in decline. But since the end of last year automatic enrolment has been helping to reverse that trend. We're taking the hassle out of joining a pension and giving millions more people a chance to start putting something aside for their retirement and get a contribution from their employer on top."
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