Seven in 10 (70 per cent) UK adults that are not retirees had a pension that is in accumulation as of February 2020, an 8 percentage point increase from 62 per cent in 2017, according to the Financial Conduct Authority (FCA).

The FCA’s Financial Lives 2020 survey: the impact of coronavirus attributed the increase to the introduction of auto-enrolment in the UK.

Pension take-up has increased particularly among employees aged between 25 and 54, with 90 per cent of this cohort saving into a pension, up from 82 per cent in 2017.

Including retirees, 58 per cent of UK adults had a pension in accumulation, compared to 51 per cent in 2017.

However, the FCA pointed out that there were still 9.6 million adults (24 per cent) who were not retired and did not have a pension in accumulation.

Meanwhile, 7 per cent said that they did not know whether they had a pension in accumulation.

Furthermore, although 70 per cent of non-retired adults had a pension in accumulation, only 60 per cent were making contributions to a pension.

Just over a fifth (21 per cent) of non-retirees were contributing to a defined benefit (DB) pension, 37 per cent were contributing to a workplace defined contribution (DC) pension and 5 per cent were contributing to a non-workplace DC pension.

Excluding retirees, those aged between 18 and 21 were the least likely to have a pension in accumulation (16 per cent), while 28 per cent of the unemployed and 55 per cent of the self-employed were saving into a pension, respectively.

The FCA noted that these cohorts were unlikely to be eligible for auto-enrolment.

Four in five (40 per cent) UK adults had a DC pension in accumulation, 22 per cent held a DB pension in accumulation, and 4 per cent had both.

Pension ownership was found to be higher among men than women, with 62 per cent of men saving into a pension compared to 54 per cent of women.

Over a third (31 per cent) of DC pension holders did not know the approximate size of their pension.

Nearly two-fifths (39 per cent) of adults with a DC pension in accumulation had a combined pot worth less than £10,000.

Commenting on the FCA’s report, Aegon head of pensions, Kate Smith, said: “The figures show the self-employed have been hit the hardest since the start of the pandemic in terms of household income, with six in 10 seeing their income fall from March to October 2020.

"This is particularly concerning for the long-term financial resilience of this large part of the workforce as the self-employed already face challenges compared to employees when it comes to their pension savings, as they do not benefit from being automatically enrolled into a workplace pension and receive the valuable employer contributions which come with this.
 
“The government has provided an unprecedented level of support for businesses and workers but concerns remain over the long-term impact of the pandemic on the nation’s financial resilience, particularly for those who have lost their jobs or seen incomes reduce, this is likely to mask the true impact on people’s financial vulnerability.

"As we emerge from the worst of the health crisis it will be crucial that we do not forget the importance of financial wellbeing which could have lasting consequences on people’s financial futures.”

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