The aggregate total private pension wealth of all households in the UK in July 2014 to June 2016 increased to £5.3trn, according to the Office for National statistics (ONS).
Its Wealth and Assets survey found this has increased from £4.4trn based on July 2012 to June 2014 figures.
Between July 2014 and June 2016, 66% of employees were actively contributing to a private pension scheme – compared with a quarter of self-employed workers.
The median pension wealth in this time period for employees was at £33,000, compared to £31,000 for the self-employed.
The same survey also demonstrated just under half of individuals aged 16 to 64 had some form of active private pension that they were contributing to between July 2014 to July 2016, up from 44% in July 2012 to June 2014.
Commenting on the figures Barnett Waddingham senior consultant Malcolm McLean said: “There is a lot of good news in these figures. Total private pension wealth has increased and many more people of working age are contributing to a private pension arrangement than previously.”
He added there are some big discrepancies, however, between different groups.
“Since the financial crash in 2008 – the numbers of self-employed people has been increasing, yet, over that period, the number of people contributing into a pension plan is reducing, and the government should be concerned. It must extend automatic enrolment (AE) to the self-employed.
“There is clearly an immediate need to find a way of boosting the savings habits of self-employed workers, which many of us saw as being possible through the ambit of AE but which the government currently does not appear to want to do.”
He further pointed out that the gap between the public and private sectors is growing, and should be addressed, not by “hitting public sector entitlements but by encouraging, nudging or, if necessary, compelling, greater contributions to private saving.”
He concluded: “Minimum AE contributions to defined contribution pensions will be going up over the next two years but at only 8%. This will need to increase further thereafter, to 12% if more sustainable pension levels are to be achieved.”
The Wealth and Assets Survey is a longitudinal household survey in which respondents are interviewed every two years – with each two-year period being termed a ‘wave’.
At the start of each wave, in addition to going back to responding households from the previous wave, a new ‘cohort’ of addresses are selected with the aim of maintaining an achieved number of responding households of around 20,000.