The rate of workers who opted out of saving in the financial year 2021 to 2022 dropped during the lockdown.
The overall rate of “stopping saving” increased in the fiscal year 2021–2022, driven primarily by people who cease saving because of a loss of work which was around 1.8 per cent of eligible employees, but this is still below pre-pandemic levels of 1.9 per cent.
In the fiscal year 2021–2022, 0.6 per cent of workers who saved for their pensions at their place of employment actively chose to quit saving.
Hargreaves Lansdown senior pensions and retirement analyst Helen Morrissey says: “The pandemic has brought financial turmoil for many people with concerns we could see people forced to stop their pension contributions as they struggle to make ends meet. So far, we’ve seen no dramatic spike in the number of people making an active decision to stop their pension contributions in 2021-22 with only 0.6 per cent of eligible employees opting to do so – the same level as the previous year and slightly below pre-pandemic levels. However, while we may have weathered one storm the challenges continue and whether people can commit to keeping their pension contributions going as we face the biggest cost of living crisis in living memory remains to be seen.
“The data shows auto-enrolment has become embedded into our working lives. Over the past decade, pension participation has almost doubled from 10.7m to 20m with groups who have previously missed out on workplace pensions now getting involved. The retirement prospects of women and younger workers, in particular, have been improved and we have even seen the number of non-eligible employees asking to be enrolled on the rise.
“However, not everyone is benefiting from the auto-enrolment pension boost. The self-employed continue to stand out as an under-pensioned group with less than one in five currently contributing to a pension. It may be the case they favour other ways of saving for retirement over pensions but more needs to be done to help them prepare for retirement.”