New analysis from leading online pension provider, PensionBee, suggests that pension savers put significantly more money aside for their retirement at the start of 2023 than they did towards the end of 2022, despite persistent levels of high inflation.
The average quarterly contribution amount for female savers increased by 58 per cent, from £712 in Q4 2022, to £1,128 in Q1 2023 which incorporates the end of 2022/23 tax year. Meanwhile, male customers, who continue to contribute more to their pensions than female savers, increased their average quarterly contribution by 54 per cent over the same period, from £1,017 in Q4 2022, to £1,568 in Q1 2023.
Self-employed savers also managed to put more into their pensions in the first three months of the year, with their average quarterly contribution amount increasing by 63 per cent from £975 in Q4 2022, to £1,591 in Q1 2023.
When comparing trends in Q1 2023 to Q1 2022, it’s clear that pension savers are contributing a greater amount to their pensions than this time last year, despite a notable rise in living costs over this period. When comparing year-on-year, the biggest change can be seen in the average contribution amount from male savers, which increased by 24 per cent from £1,261, to £1,568, while contributions made by female savers rose by 15 per cent, from £981 to £1,128 in this period.
Commenting on the results, Becky O’Connor, Director of Public Affairs at PensionBee, said: “Increased pension contributions suggest defiance against the odds among pension savers, who seem more determined than ever to continue putting some of their earnings towards their future, despite the increasing cost of living."
She continued: "The data trends contradict expectations that high inflation would force people to sacrifice their future financial security to meet their immediate day-to-day needs, like food and energy bills. While that may be true for some, the general trend suggests that a greater focus on household budgeting has increased peoples’ focus on all aspects of their financial wellbeing, including their retirement provision.”
“Many may also have been keen to boost their contributions before the end of the tax year, to reduce their 2022/23 tax bill. Increased contributions could also be a result of higher wages, with average annual weekly earnings up by 5.9% in the year to the end of February.”
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