Eligible private sector employees paid a record £25.5bn into workplace pensions in 2024, according to analysis by Broadstone.
According to an analysis of newly published Department for Work and Pensions data, the total marks a small uptick from the previous high of £25.3bn in 2019, before contributions fell during the pandemic and cost-of-living crisis. The rise reflects growing participation in defined contribution schemes and improved data capture, particularly among higher earners.
Employers contributed £46.4bn, bringing total pension savings for eligible private sector workers to £82.8bn, just below the 2019 peak of £83.6bn, driven by lower employer payments.
However, the median annual contributions have remained relatively stagnant at £3,230, down from £3,390 in 2019 and largely unchanged over the past four years.
Additionally, there was a record £10.8bn in pension tax relief in 2024.
Broadstone senior DC consultant Richard Sweetman says: “While it is great that the aggregate value of employee contributions has risen to record levels, this is primarily driven by rising numbers of workplace pension savers.
“It is alarming that median contributions have not really moved much of late in a trend that is unlikely to escape the gaze of the newly-formed Pensions Commission which is charged with improving pension adequacy in the UK.
“As the Chancellor examines her available options at the Autumn Budget for raising revenue, the record value of pensions tax relief for private sector employees will also be noted with interest.”
“Small, incremental increases in contributions can have a big impact over a working life, particularly when combined with strong investment performance and low fees. Savers should review their pension regularly to ensure their money is working hard, and consider how their total retirement income, including the State Pension, measures up against the lifestyle they want. From there, they can adjust their contributions to help close any gap.”