Pension savers increased their average quarterly contributions by 63% in the first quarter of 2024 compared to Q4 2023, PensionBee has found.

The online pension provider pointed towards the end of the tax year as the reason why this investment level increased, as savers tried to maximise their tax relief by contributing up to their total earnings for the year.

It added that many would have taken advantage of the increased annual allowance, which rose from £40,000 to £60,000 in the 2023/24 tax year.

The average quarterly contribution amount for female savers rose by 60%, from £873 in Q4 2023 to £1,395 in Q1 2024, while male savers’ average contributions jumped by 63% from £1,121 to £1,822 in the same period.

Self-employed savers also gave their pensions a boost in the last three months of the tax year, with their average quarterly contribution increasing by 27% from £1,384 to £1,762.

Director of public affairs at PensionBee, Becky O’Connor, said: "It’s encouraging to see consumers increasing their pension contributions and taking advantage of the tax benefits associated with this.

"Despite the prolonged cost of living pressures, the rise in the annual allowance threshold appears to have motivated pension savers to prioritise their pension contributions.

"As we look ahead to the election, the potential reinstatement of the lifetime allowance by Labour, if elected, could reshape the limitations of the annual allowance and tax penalties. Regardless of any change in Government, the annual allowance must remain generous enough to incentivise consistent pension contributions, as this will enhance consumers’ quality of life at retirement."

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