Average pension pot size on the rise
How big is your pension pot?
New research has found that the average pension pot size for UK employees in large firms is now £120,000.
There's been a 35% increase in average pension pot size in the past three years, according to the latest 'Changing Trends of Financial Wellbeing' report from Close Brothers.
However, when other savings and investments are considered, the average size of these non-pension assets has fallen by 3%.
Back in 2017, the average pension savings pot, including all workplace pension schemes, stood at £89,000.
Women seem to be doing better than men, with an increase since 2017 of 38%. However, pension savings for women remain behind those for men, with £73,000 on average compared with £162,000.
The research also found that 24% of UK employees don't know the total value of their pension savings. Older employees are even less likely to know how much sits in their pension pots, with 30% of over 60s unaware.
7% of employees have no savings in pensions, which is a 13% rise in savings since 2017 when 20% did not have a pension pot.
Again, the gender difference here is stark, with three times as many women as men having zero pension savings.
The ongoing coronavirus pandemic has resulted in 16% of workers reducing their contributions to pension plans.
Looking at the bigger picture, the average savings pot for a UK employee stands at £31,000, down 3% on the £32,000 average found in 2017.
Jeanette Makings, Head of Financial Education at Close Brothers, said: "While it's really good news to see the improving pensions landscape, no doubt spurred on by the effects of auto-enrolment and financial education, there is still a significant amount of work to be done to educate employees to balance their savings plans to ensure they can support their lifestyle now, for the future and for retirement. With the stark gender imbalance, this is even more urgent for women."
For employers, there is a need to understand better the financial health of employees and identify the key employee groups and financial issues that need addressing. This would be a useful first step in delivering a tailored financial wellbeing programme that will drive change.
Meanwhile, in a separate piece of research, Scottish Widows has warned that, despite the success of auto-enrolment, nearly half of 22-29-year olds are still failing to save enough for retirement.
Scottish Widows is calling on the government to devise new reforms to help the youngest individuals to save for retirement, particularly in the light of the impact of Covid-19.
If you need help and advice on your auto-enrolment scheme or with your financial wellbeing programmes, please contact us today.