Nest Insight, a public-benefit research and innovation centre, has published its annual ‘Retirement saving in the UK 2022’.
The report shares insights into the savings behaviours of over 11 million Nest members between April 2021 and March 2022, a sample that includes around a third of the UK working population.
According to the analysis, the Nest pension plan has remained operating as usual. In spite of the end of government interventions like the Coronavirus Job Retention Scheme (CJRS), which helped to mitigate the negative economic effects of lockdowns and restrictions, contribution levels paid by employers and members remained largely stable over the course of the year ending March 31, 2022.
There are currently about 1 million enterprises registered with the scheme, an increase of about 10 per cent from 2020/21. Compared to 2020/21, there were 17 per cent more enrollments.
In comparison to 2020/21 levels, there was a consistent rise in pension pot balances (11 per cent increase) and contribution amounts (10 per cent increase).
The overall amount of additional member contributions made to the scheme increased by a little over 50 per cent over the previous year, with a 36 per cent increase in the number of members who made their own additional contributions to their retirement pots.
Furthermore, opt-out rates stayed low at about 8 per cent.
Nest Insight director of analysis Matthew Blakstad says: “Despite the turbulence during the year ending March 2022, the pensions auto-enrolment system, as seen through the lens of Nest’s administrative data, has remained stable. The great majority of Nest members have continued to follow the default settings that they’ve been enrolled into and, as a result, overall levels of retirement savings have continued to rise throughout these challenging times – supporting the objective of the UK’s workplace pension reforms, helping millions more people secure a better retirement.
“Of course, we know that the rising cost of living is a further challenge now facing all pension savers. Nest Insight will continue to report on this emerging issue in future research and in further editions of ‘Retirement saving in the UK’. Nest Insight is also currently doing in-depth research into the interactions between auto-enrolment pension saving and other financial behaviours. This work is helping us understand how best to support pension savers with their overall financial health.”
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