Scotland tops table for pension participation but savings levels must increase – Isio – Scottish Business News

“Government data released today reveals the Scotland has a high level of participation for workplace pensions, at 91%. That is consistent with last year, but a huge increase from 2009, when participation in Scotland stood at just 63%. The data also reveals that 88% of eligible private sector employees in the Scotland contribute to a workplace pension, which is a testament to the success of the pensions auto-enrolment policy and should be commended.

“Unfortunately, we know that the actual amounts people across the UK have saved in their pension remain low, and likely nowhere near what they’ll need to enjoy the quality of life they will be hoping for in retirement. It is positive that the new government has announced it is looking at ways to extend participation and increase levels of savings. However, during a cost-of-living crisis, individuals may not thank them for looking after their future savings needs at the expense of their take home pay today.”

Flexible pensions options needed

“When we look to the public sector, participation in Scotland is higher than for the private sector, at 96%. Public sector pensions are usually more generous than in the private sector, but public sector pensions can also be less flexible, and demand high contribution levels from their members and employers.

“Cost pressures mean these contribution levels are unsustainable for a lot of public sector workers, who may prefer to have more cash available in their pay to meet immediate needs. We are seeing increasing signs that some feel their only option is to stop saving into their pension altogether, including missing out on high levels of employer contributions. Introducing greater flexibility into public sector pensions would be one positive step that would allow members the option to boost their take home pay for a short period, without having to fully stop building up pension savings for their retirement.”