Common belongings per member of outlined contribution pensions have fallen by 66% for the reason that starting of 2012, in keeping with new knowledge from The Pension Regulator.
At 1 January 2024 the typical pot worth stood at £5.846, compared to £17,206 in 2012.
One of many causes of the drop is a big development in scheme membership because of the introduction of auto-enrolment.
There have been 27.2m DC scheme members at 1 January.
In 2023, 340 DC pension schemes have been used for auto-enrolment, a 42% improve within the 240 used for a similar objective in 2016.
In whole in 2023 99% of members of DC schemes have been in schemes which were utilized in auto-enrollment.
Helen Morrissey, head of retirement evaluation at Hargreaves Lansdown, mentioned that the newest figures from The Pension Regulator show how these saving below auto-enrolment will not be saving sufficient.
She mentioned there’s a danger that “when increasing their pension schemes to extra folks, employers have made them decidedly much less beneficiant, so fewer folks don’t have anything, however extra of those that are saving aren’t doing sufficient to safe a good retirement revenue.”
She added that the extension invoice to auto-enrolment may assist resolve the issue.
She mentioned: “It does additionally level to the significance of assessing AE contribution ranges to verify they’re enough and in a position to assist folks construct a resilient retirement revenue. The Auto-enrolment Extension Invoice reforms would have a huge impact right here by enabling folks to start out their pension saving journey earlier and it’s disappointing that these reforms may very well be delayed till later this decade.
“Different reforms may embody how employers may very well be incentivised to contribute extra to their worker’s pensions – as an illustration boosting the contributions of these staff who’re prepared to place in additional themselves.”
In keeping with the information, the market additionally continued to pay attention away from smaller schemes. The variety of non-micro DC and hybrid schemes decreased by 11% over the past yr whereas the variety of members elevated by 9%. The discount in schemes was solely pushed by schemes with fewer than 5,000 memberships.
Of all DC schemes, grasp trusts accounted for over 90% of non-micro memberships and 78% of whole belongings.
