Half of savers have never considered increasing workplace pension contributions

• 48% of people know the process to change their pension contributions with their current employer, but 50% say they have never considered increasing their current workplace pension contributions.
• Almost three in ten say they don’t know the process to increase their pension contributions (28%), while a quarter are unsure (24%).
• Men are more likely to say they know the process (55%) than women (39%).
• 42% of individuals would consider increasing their contributions with a pay rise, but only 27% would commit to raising their contributions outright, if they had a pay rise.

The Pensions and Lifetime Savings Association’s (PLSA) latest research has found that almost half (48%) of people understand the process for changing their pension contributions with their current employer. However, 50% of individuals have never actually considered increasing their contributions with their current employer.

The research sheds light on a troubling disconnect between awareness and behaviour when it comes to pensions. Despite being aware of the process, the majority have not yet taken action, which could have serious implications for their long-term financial security.

Pay rises present savers with an excellent opportunity to consider increasing their pension contributions. Encouragingly, our survey highlights that many savers are open to this idea. While 42% say they would consider raising their pension contributions depending on the size of the pay rise, a further 27% are ready to make additional contributions regardless of the size of the increase. This demonstrates that while the financial capacity and willingness are there, translating this intention into action remains a challenge for many, with other priorities taking precedence.

THE AGE, GENDER AND INCOME DIVIDE
The research also revealed stark differences in pension engagement depending on age, gender and income. Younger individuals, particularly those aged 18-34, are more likely to increase their pension contributions if they get a pay rise (37%) compared to those aged 55 and over (20%).

The biggest gap, unsurprisingly, is noted amongst income. Higher earners (those with a household income over £69k) are far more likely to consider increasing contributions (41%) than those with lower household incomes (16%).

Similarly, men are more likely to say they have considered increasing their pension contributions with their current employer (52%) than women are (40%). In addition, men are more likely to say they know the process (55%) than women (39%).

THE KNOWLEDGE GAP
While many people understand how to make changes to their current workplace pension (48%), a significant portion of the population still lacks this knowledge. Around 28% of people do not know the process to increase their contributions, and 24% are unsure. This group represents those who are still uncertain about the process, but the larger issue lies with those who are fully aware and not yet acted.

Zoe Alexander, Director Policy & Advocacy, PLSA, said: “This research underscores the gap between knowledge and action when it comes to pensions. People understand the need to save more, they know how to do it, they even want to do it, but for many, it simply doesn’t happen. The reality is that many individuals are putting off important pension decisions because they feel overwhelmed by today’s financial pressures or are unsure about how to make the changes. More needs to be done to help people take the next step - whether it’s through better education, clearer communication, or making pension adjustments more automatic.

“Pensions can feel like a distant concern, but that attitude is leading to poor outcomes down the line. Those with DC pensions are more likely to need to take positive action themselves to secure the retirement they expect, as the default 8% savings rate may fall short. Small actions, like reviewing investments, slightly increasing contributions, or maximizing employer matching, can significantly impact long-term outcomes.

“However, employers and policymakers need to consider clearer guidance and behavioural nudges to help people act sooner rather than later. The process needs to be as simple and straightforward as possible, and we need to help people make their pension savings a more immediate priority, especially if they have the ability to save more.

“Without addressing this disconnect, many people will continue to miss out on the retirement they hope for.”

Mark Smith, Head of Media Relations
020 7601 1726 | [email protected]

Cali Sullivan, Senior PR Manager
020 7601 1761 | [email protected]