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Industry Insights
June 13, 2024

Savers boosted pension contributions by more than 60% at start of 2024

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Pension savers increased their average quarterly contributions by 63% in Q1 2024 compared to Q4 2023 as the end of the tax year drew closer, according to new analysis from leading online pension provider PensionBee.

The average quarterly contribution amount for women rose by 60%, from £873 in Q4 2023 to £1,395 in Q1 2024.

Men continued to save more into their pensions than their female counterparts, boosting their average quarterly contribution amount by 64%, from £1,242 to £2,038.

Self-employed savers also gave their pensions a boost in the last three months of the tax year, with their average quarterly contribution amount rising by 63% from £1,121 in Q4 2023, to £1,822 in Q1 2024.

PensionBee said the overall increase in pension contributions could be attributed to savers maximising available tax relief by contributing up to their total earnings for the year into their pensions or taking advantage of the increased annual allowance, which rose from £40,000 to £60,000 in the 2023/24 tax year.

PensionBee’s director of public affairs, 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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Matthew Sinclair (left) and Chris Breward (right), Chartered Financial Planners at Wealth of Advice