Savers contributed over 20% more to their pensions in Q2 2023 compared to the same period last year, despite persistent levels of high inflation, analysis from PensionBee has revealed.

According to the research, the average quarterly contribution amount for female savers increased by 21% during the period, from £883 in Q2 2022 to £1,065 in Q2 2023.

Male savers also upped their contributions during the quarter, boosting their average quarterly contribution amount by more than a quarter (27%), from £1,108 in Q2 2022 to £1,413 in Q2 2023.

A similar trend was seen amongst self-employed savers, as PensionBee's analysis found that their average quarterly contribution amount rose by 9% from £1,279 in Q2 2022, to £1,390 in Q2 2023.

PensionBee suggested that the overall increase in pension contribution amounts could be attributed to recent wage rises, pointing out that the latest data from the Office for National Statistics showed that employees’ average total pay grew 6.9% from March to May 2023.

Given this, PensionBee suggested that savers are likely determining contribution amounts based on a percentage of their earnings rather than their disposable income levels.

In addition to the increase in pension contributions, PensionBee’s analysis found that the average quarterly withdrawal amount for customers aged 55 and over fell by 10%, from £8,489 in Q2 2022 to £7,648 in Q2 2023.

PensionBee highlighted this finding as demonstration of a broad adoption of a more cautious approach to withdrawals amid the cost-of-living crisis, as savers hope to make their money stretch further for longer.

PensionBee director of public affairs, Becky O’Connor, stated: “The rise in year-on-year contributions among PensionBee customers suggests that pension saving amounts may be more strongly linked to earnings, which have risen in general over the year, rather than disposable income levels, which most people have struggled to maintain due to the cost-of-living crisis.

“It also demonstrates a determination and laser-like focus among people who are consciously trying to boost their retirement savings for themselves, in the face of the odds. What we don’t know is what people might be giving up to prioritise their pensions in this way, but it appears those who have set this priority are not just sticking with it, but really going for it.

“The decrease in withdrawal amounts suggests that the over-55s are cutting back and managing their retirement pots conservatively. Perhaps the cost-of-living crisis has focused minds on trying to make that pot last as long as possible.

“Adding more and taking out less are two positive signs of behaviour change in the past year that could have long-lasting benefits for pension savers.”

Share Story: