One in seven pre-retirees don’t have a pension

Retirement saving plan

One in seven people aged between 55 and 65 do not have a private pension, according to the latest research from Aegon.

The pension provider says that this means there are some 1.2 million people approaching retirement who will not have any other income to supplement their state pension.

Women were most likely not to have a pension, with 20% not paying into a retirement savings plan, compared to 12% of men.

The findings show that despite the introduction of auto-enrolment (where people are automatically signed up to a workplace pension), many people are still slipping through the net and at risk of finishing their working lives without any pension savings.


Commenting on the findings, Kate Smith, head of pensions at Aegon says: “Auto-enrolment which launched in 2012 as the Government’s flagship policy to increase the number of people saving for retirement, has undoubtedly been a success. To date 7.5 million employees have been enrolled into a workplace pension scheme and for many of these people, this will have been their first pension. However, as our figures show, there is a portion of the population who either feel unable to or are unwilling to save for retirement.”

This is likely to include those that are self-employed or work in the ‘gig’ economy as well those who do not meet the earnings criteria for auto-enrolment. There will also be some that opt out of their workplace scheme because they do not see the value of pension or do not feel they can afford to pay into it.

Aegon says it hopes that these issues will be tackled in the government’s latest review of auto-enrolment.


Ms Smith adds: “Those without pension savings are likely to be reliant solely on the state pension, as they may have no other savings. For those entitled to the full amount from the new single tier state pension, this is equivalent to an income of £8,297 per year, and, in the main, it will no longer be possible for spouses to inherit their partner’s pension.”

She adds that it may not cost as much as people expect to make meaningful contributions into their pension. “Saving a modest amount can really add up over the years and the good news is that a £100 pension contribution for example costs you much less than its face value.

“This is because the government gives people a bonus so a £100 contribution only costs a basic rate tax payer £80 in take home pay, and the government then tops up the pension by £20. If your employer is prepared to ‘match’ your contribution then this could be just £40 from you, £10 from the government and £50 from your employer, making pension saving more affordable than you think.”


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I was disappointed to find that some of the biggest 3rd party payroll companies still haven't the software to allow increased pension contributions over and above the statutory minimum for auto-enrolled company schemes.  I can only pay 1% of my salary in each month whereas I would like to pay in 5 or 10%. The only way I can do that is to make manual payments each month and then claim the tax back via self assessment.  It hardly encourages people to save for their retirement!

Thanks for your comment Portland Bill, we've featured it on the Letters page of our June issue with the following response:

Moneywise says: We agree – while auto-enrolment is a good starting point to encourage pension saving from a young age, there are still teething problems with the system, the minimum savings levels are too low, and certain groups, such as the self-employed, are left
out. Moneywise columnist Jeff Prestridge also wrote in his May 2017 column that “auto-enrolment needs a major shake-up”.

Best wishes,