Increase driven by employer payments
Pensions contributions by scheme
Total contributions to private (non-state) pensions are estimated to have risen from £37 billion in 1996 to £69 billion in 2004. There has been a marked increase of 26 per cent in contributions in the latest two years, driven mainly by employers' contributions to funded occupational schemes.
Contributions to funded occupational schemes increased from £26 billion in 2002 to £37 billion in 2004 - a change of 42 per cent. This increase has been driven by employers' contributions which rose from £19 billion in 2002 to £30 billion in 2004. Employees' contributions were unchanged at £7 billion over the same period. There was strong growth in both normal and special employers' contributions. The latter are often lump sum payments made when defined benefit pension funds are assessed to be insufficient to meet future payments.
Contributions to unfunded occupational schemes, mainly public schemes such as those for teachers and National Health Service staff, increased from £15 billion in 2002 to £18 billion in 2004 (these include imputed contributions by employers). Contributions to personal pension schemes increased more slowly, from £14 billion to £15 billion over the same period.
Source: Office for National Statistics
Notes: These figures are taken from the article 'Private pension contributions: updated estimates 1996-2004' and were incorporated into the national accounts dataset released on 30 June 2005. The article explains how the figures are built up from a number of sources, including some use of estimation techniques rather than ONS survey data for pension business carried out by insurance companies. The aggregates are regarded as a reasonable guide to trends in pension contributions, but survey considerations and other difficulties inherent in the estimation of pension flows mean that they are still subject to a degree of uncertainty.
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