Private pension saving is growing but ONS survey reveals stark disparities
Almost a third of people, surveyed between April 2018 and March 2020, did not expect to have any pension provision beyond the state pension when they retire, according to a report from the ONS released today. 
The ONS also found that in that period, 57% of people aged 16 years to State Pension age were contributing to a private pension compared with 43% between July 2010 and June 2012.
Notably, in terms of distribution, the top decile held 64% of all private pension wealth while the bottom five deciles held less than 1%.
Adrian Lowery, financial analyst at wealth manager Evelyn Partners, comments:
‘The growth in private pension saving is a positive, with the ONS noting that it has been driven by private sector employees paying into defined contribution pension schemes, which are the kind typically offered under auto-enrolment.
‘The survey also showed that it was the first period in which people were more likely to be paying into a defined contribution pension (26%) rather than a defined benefit pension (23%). This finding might come as something of a surprise to many workers in the private sector, where final salary schemes that remain open to employees have been as rare as hens’ teeth for years. But the differential is narrowed by the public sector where defined benefit schemes are still commonplace.
‘The upshot is an increasingly two-tier private pension system, with many public sector workers continuing to benefit from the certainty of final salary pensions, while private sector workers shoulder the risks and uncertainty inherent in defined contribution schemes.
Moreover, as people move jobs more frequently than in the past, they will collect multiple pots, and in some cases it will be useful for savers to seek financial advice, or coaching, as to the best way to manage these pots – particularly if they are close to the Lifetime Pension Allowance, and if they are not confident in making investment decisions.
‘That a third of people of working age expect to be relying on the state for pension provision when they stop working suggests there’s something of a retirement living standards shock in store for many households in the coming decades. And unfortunately, though perhaps not surprisingly, this is very unevenly distributed.
‘It is a striking figure that, with 64% of total pension wealth, a tenth of the population holds more private pension wealth than the rest collectively. Looking at the reasons behind this, having low income or not working was the most common reason for not paying into a pension (54%).
‘Self-employed people were more likely to say they could not afford to contribute (39% versus 26% for employees). And in the period surveyed, only 20% of self-employed people were paying into a pension compared with 80% of employees.
‘The figures lay bare the need not just for lower-paid workers to be given more assistance in making personal provisions to supplement the state pension. But also, and there is doubtless plenty of crossover, the gaping hole in pension saving among the self-employed, who are not nudged by auto-enrolment and don’t benefit from employer contributions.’
 Saving for retirement in Great Britain: April 2018 to March 2020. Private pension wealth in Great Britain, taken from the seventh round of the Wealth and Assets Survey.
 Formerly known as Tilney Smith & Williamson.