Employee contributions fell by 11% between January and March last year states figures from the Office for National Statistics (ONS) which continued through to June with employers also cutting contributions by 5% during the second quarter.
On 23 March 2020 England’s first national lockdown started with millions of people furloughed on 80% of salary causing which caused a big stain on household budgets resulting in a reduction on enrolment contributions.
Tom Selby a senior analyst from AJ Bell reported that there is now a clearer view of the impact on saving for retirement from the first wave of coronavirus now that significant time had elapsed from the first wave.
People will probably have opted out due to pressure on their incomes caused by the pandemic probably because of furlough. This last year has been a turbulent period and Canada Life’s technical director Andrew Tully said that this data was an ‘interesting snapshot’. It is worrying that contributions from employer and employee schemes have fallen but overall membership has remained fairly positive.
As a nation we are already under-saving for our retirement and as we move forward from the coronavirus crisis we must find ways to increase this pension saving back to previous levels.
If you are worried about the impact on your pension due to the effect of being furloughed or made redundant please contact us for a free financial review.