- Southerners have a pension pot almost twice the size of Northerners
- Welsh making the most regular pension contributions
- Northern Irish putting the most into their pension
- Londoners set to retire on a quarter of their current income
PensionBee has examined a sample of 5,098 savers, looking at how average pot size and pension contributions vary across the country.
According to the analysis the average pot size across the UK is £21,441, although this figure doesn’t appear to be split evenly across Britain’s towns and cities. In North East England the average pot sits at £14,513 - the lowest figure in the study - while in South East England the average is £28,183, making these savers the best provided for in the country.
| Region | Average pension (£) | Sample |
|---|---|---|
| England | 21,730 | 4,544 |
| East Midlands | 15,531 | 435 |
| Greater London | 24,503 | 1,605 |
| North East | 14,513 | 303 |
| North West | 15,509 | 492 |
| South East | 28,183 | 991 |
| South West | 16,356 | 393 |
| West Midlands | 19,203 | 325 |
| Northern Ireland | 14,796 | 60 |
| Scotland | 21,482 | 337 |
| Wales | 15,473 | 157 |
| United Kingdom | 21,441 | 5,098 |
Source: PensionBee. Note many customers will have additional pensions to transfer to PensionBee, but we do not believe this impacts any particular region disproportionately.
The findings provide yet more evidence of a divided nation, with swathes of Northern England netting a pension that’s almost half the size of southern pots.
The North-South split in England also spreads out to the UK’s constituent countries, with Wales (£15,473) Northern Ireland (£14,796) and Scotland (£21,482) all struggling to match southern pots. However, PensionBee’s contribution data suggests that certain regions might still close the gap.
According to their analysis 40% of Welsh customers are contributing every month, making Wales home to the UK’s keenest savers (Appendix A). However, it’s the Northern Irish that lead in terms of contribution size, with savers in this region putting around £310 per month into their pension (Appendix B).
Thanks to these sizeable contributions Northern Irish savers can expect a pot of £144,100 at retirement, an amount that’s only second to the £149,900 savers in the South East can expect (Appendix C). There’s an indication that a big pot won’t necessarily give you the same standard of life in retirement though, as reflected by PensionBee’s replacement ratio research. Despite a potential pot of £135,200, Londoners are set to live on 22% of their current income - the lowest overall percentage in the analysis (Appendix D) – and this figure includes the state pension.
Speaking on the findings Romi Savova, CEO of PensionBee said: “The data clearly shows that the most important part of a pension is how much you put in. The government has made it attractive to save and as an industry we need to do the same, by improving customer service and embracing technology. We’re passionate about taking the lead on this and closing the pension gap across the country”.
Note to Editors
Romi Savova, CEO of PensionBee available for interview or comments.
For more information, please contact:
- Jasper Martens
- 020 3859 5788
- [email protected]
Appendices
We compared 5,098 individuals with PensionBee pensions, who are broadly distributed like the general UK population between England, Northern Ireland, Scotland and Wales, albeit with a slightly higher concentration in London.
The sample includes 1,375 women, representing 27% of the sample and 3,723 men, representing the remaining 73% of the sample. The sample represents an age group of 22-63 years with an average age of 37. The average salary of the sample group is £46,883, so higher than that of the broader UK figure of £30,537, according to figures from Monster.
Appendix A: Average propensity to contribute
| Region | Propensity to contribute (%) | Sample |
|---|---|---|
| England | 32 | 4,544 |
| East Midlands | 34 | 435 |
| Greater London | 32 | 1,605 |
| North East | 33 | 303 |
| North West | 30 | 492 |
| South East | 29 | 991 |
| South West | 35 | 393 |
| West Midlands | 33 | 325 |
| Northern Ireland | 30 | 60 |
| Scotland | 32 | 337 |
| Wales | 40 | 157 |
| United Kingdom | 32 | 5,098 |
Source: PensionBee.
Appendix B: Average gross and net monthly contributions
| Region | Average net monthly contribution (£) | Average gross monthly contribution (£) |
|---|---|---|
| England | 204 | 256 |
| East Midlands | 98 | 123 |
| Greater London | 227 | 284 |
| North East | 204 | 255 |
| North West | 116 | 145 |
| South East | 282 | 353 |
| South West | 133 | 166 |
| West Midlands | 211 | 264 |
| Northern Ireland | 310 | 388 |
| Scotland | 209 | 261 |
| Wales | 263 | 329 |
| United Kingdom | 207 | 259 |
Source: PensionBee. Note we only considered monthly contributions. Total sample size of 546.
Appendix C: Expected pension pot size and annual income
| Region | Pension pot at age 65 (£) | Expected annual income |
|---|---|---|
| England | 117,300 | 12,617 |
| East Midlands | 64,600 | 10,577 |
| Greater London | 135,200 | 13,217 |
| North East | 102,500 | 12,017 |
| North West | 71,800 | 10,937 |
| South East | 149,900 | 13,817 |
| South West | 77,800 | 11,117 |
| West Midlands | 112,700 | 12,377 |
| Northern Ireland | 144,100 | 13,577 |
| Scotland | 111,900 | 12,377 |
| Wales | 122,800 | 12,737 |
| United Kingdom | 118,200 | 12,617 |
Source: PensionBee. We have assumed the pension grows at an annual rate of 5% and that annual charges are 0.7%. Inflation of 2.5% reduces the rate of return. It is assumed that the pot is converted into an annuity at the age of 65 and the annuity rate is 2%. The annuity expense ratio is 4%. We have assumed individuals take their 25% tax free lump sum prior to purchasing an annuity. The full state pension at current levels has been included in the expected annual income.
Appendix D: Average salaries and replacement ratios in retirement, including the state pension
| Region | Salary (£) | Replacement ratio (%) |
|---|---|---|
| England | 48,344 | 26 |
| East Midlands | 32,303 | 33 |
| Greater London | 60,037 | 22 |
| North East | 37,819 | 32 |
| North West | 39,461 | 28 |
| South East | 54,151 | 26 |
| South West | 32,633 | 34 |
| West Midlands | 39,623 | 31 |
| Northern Ireland | 32,168 | 42 |
| Scotland | 35,427 | 35 |
| Wales | 37,442 | 34 |
| United Kingdom | 46,883 | 27 |
Source: PensionBee. Forecasting assumptions as above.
