Workplace pension contributions bounce back after slump

Employee and employer contributions to private-sector defined contribution pension schemes both increased in the third quarter of 2020, the most recent data from the Office for National Statistics (ONS) shows.

Between Q2 (April to June) and Q3 (July to September) 2020, employee contributions grew by 12% and employer contributions increased by 7%.

This followed a decrease reported in the previous ONS release, which showed employee contributions falling by 11% between the first and second quarters of 2020, and employer contributions by 5%.

The ONS noted that the furlough scheme, which includes support for pension contributions, saw a decrease in membership between the second and third quarters of 2020.

There were 2.8 million people on furlough through the scheme by 30 September 2020, compared to 6.8 million at the end of June 2020.

Helen Morrissey, pension specialist at Royal London, said:

"After seeing a dip in employer and employee pension contributions in the last set of data, it is encouraging to see the figures have bounced back.

"While this will be because less workers were on the job retention scheme, it is heartening to see the uncertainty caused by the pandemic has not caused people to turn their back on pensions by either stopping or slashing their contributions long term."

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