Bookmark Us

MPs have urged the Pensions Regulator to help employees who do opt-out due to financial difficulties during the pandemic to re-enrol than would happen normally under auto-enrolment.

Almost 9 in 10 of eligible employees (88%, 19.2m people) have saved for retirement through their workplace pension: an increase from 55% in 2012 when automatic-enrolment began, DWP figures have said.

However, pension participation among self-employed people continued to fall from 21% in 2009/10 to 14% in 2018/19.

The annual total amount saved for eligible employees was £98.4bn in 2019, an increase of £5.3bn from 2018.

£40.5bn was saved into public sector schemes (41%), with £57.9bn (59%) saved into private sector schemes.DWP data from December 2019 showed 5.44m people were employed in the public sector (16%) compared to 27.55m (84%) people in the private sector.

Following the release of the data, Hargreaves Lansdown shared concerns about the pension savings figures for the self-employed.

Nathan Long, interim head of policy at Hargreaves Lansdown said: “The self-employed continue to be precariously placed with just a handful choosing to save into a pension, showing the existing incentives just don’t resonate. The Government will also be acutely aware that 41% of all pension contributions go to public sector employees that represent less than a fifth of all workers.”

The Pensions Regulator has so far issued 115,459 auto-enrolment fixed penalty notices since the start of the workplace pension scheme in 2012.

Defined benefit transfer values rose nearly 4% during May with the number of members taking a transfer value also increasing from the record low observed in April.

Barnett Waddingham has warned that there are likely to be too few advisers to meet demand from the 120,000 pension savers a year it predicts will need DB transfer advice.

A record 1m more people will reach the Pension Freedom age of 55 his year and this ‘peak’ will last for several years, according to new analysis.

The Financial Conduct Authority says it will ban most contingent charging on DB pension transfers as part of a raft of measures designed to tackle ‘weaknesses’ in the DB transfer market.

A new report on retirement income has revealed that 15% of people are still working past 65 with many concerned they have enough income to retire completely.

The Financial Services Compensation Scheme received 4,100 extra SIPP and pensions claims 2019/20 than it expected, resulting in increased cost of £3.9m.

Nearly half (47%) of 55 to 64-year-olds are unaware that deferring the State Pension can boost their retirement income significantly when they start to claim their pension benefits.

Many pension savers are missing this valuable ‘Financial Planning’ option when they retire, according to research from retirement specialist Just Group.

Deferring the State Pension payment can mean significantly higher state pensions with every nine weeks of deferral boosting income by 1% - equivalent to 5.8% more income for every 52 weeks of deferral.

However, just over one in 10 (12%) of those aged 65+ had deferred their State Pension with the figure higher among women (16%) than men (9%) and also higher among the semi-retired (22%) than fully retired (11%).

Just says with Coronavirus hitting financial plans many more could consider State Pension deferral to boost retirement income.

Stephen Lowe, Just communications director, said: “Deferring State Pension is an important option for the rising number of over-65s in good health and who plan to carry on working.

“It needs to be factored into people’s Financial Planning in the run-up to retirement so it is worrying that such a high number of people aged 55-64 don’t know that there is a degree of flexibility around when and how they take their State Pension.”

According to research by Just the appetite for State Pension deferral has waned in recent years with about 1m people currently receiving extra money as a result of deferral, about 25% fewer than the peak in 2004, according to Department of Work and Pensions figures.

With the full New State Pension rising to £175.20 a week from April, deferring for one year would result in

£10.12 extra a week – more than £526 a year.

Those who have started to receive the State Pension can defer payment once during retirement.

Most people tend to defer the State Pension for between one and two years but more than half defer for longer.

Among those who chose not to defer, 31% said it was because they wanted to stop working as soon as they could. A quarter (25%) said they would have had to defer for too long to make the weekly increase worthwhile.

How long after you were eligible did you defer starting to receive your State Pension?
Up to a year -15%
1-2 years - 31%
2-3 years - 26%
3-5 years - 19%
5-10 years - 8%

Source: Just Group


Page 5 of 87

News from Twitter