The levels last year marked a 200,000 increase in workers contributing to their pension pot, according to Department for Work and Pensions (DWP) data.
Meanwhile, those who were automatically enrolled on a pension scheme added up to 20.8 million, which was 400,000 more than the year before.
Across the board, most demographics of workers saw the levels remain unchanged over the years, meaning the struggles of rising energy bills, mortgage rates and even petrol haven’t hampered their future plans.
In total, workplace pension for eligible savers – those on auto-enrolment – accounted for £131.8bn in 2023, a rise of £43.3bn in real terms compared to 2012.
Employers contributions were 64% and payments made by employees equalled 26%. The general trend towards keeping the pension pot ticking over was also clear in that below 1% of eligible savers actively opted out of the scheme.
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Elsewhere, the number of self-employed workers making their own contributions to a personal pension remained consistent at around 340,000 across both the 2021/22 and 2022/23 tax years.
While there are still concerns over a gender pay gap and an “alarming” number of women opting out of their pensions, there are positive signs felt by experts on how workers have rallied against the rise in the cost of living.
‘No collapse in pension saving is a good news story’
Emma Douglas, director of workplace savings and retirement at Aviva, said: “Today’s official figures show no collapse in pension saving and no increase in ‘dash-for-cash’ withdrawals in 2023, despite pressures on household finances as inflation hit a four-decade high.
“Across all metrics, there has been no significant drop in pension participation since last year’s report. Different genders, ages and incomes have all shown remarkable resilience.
“The same resilience has been shown by those eligible to access their pension savings, from age 55. The average individual made taxable withdrawals of about £15,000 in 2023. This is in line with recent years. The average single withdrawal in 2023 was about £3,000. This is also in line with previous years. Today’s data shows no evidence of a systemic ‘dash for cash’.”
Douglas added: “More people saving for their retirement is a good news story. And consideration when accessing these savings is also to be commended.
“It’s important that pensions continue to work for all savers and Aviva therefore welcomes the Government’s plans to review the UK’s pensions and retirement market. We see this as an important next step and look forward to working with Government and industry on the review.”
Adrian Lowery, financial analyst at wealth management firm Evelyn Partners, remarked on the rising number of taxable payments withdrawn from pensions flexibly, which rose to £15.3bn in 2024 from £12.9bn in 2023.
Lowery says this could be down to more people with defined contribution pension pots reaching retirement age, which is a trend that is likely to keep going as the numbers holding defined benefit pensions drop off.
He added: “However, HMRC says that 42 per cent of individuals who have received taxable flexible pension payments since flexibility changes were introduced in 2015 made their first withdrawal while aged 55 to 59. Meanwhile, 28 per cent were aged 60 to 64, and just 20 per cent were aged 65 to 69.
“This does suggest that many people are tapping into their pension quite early on, which is fine if they have a retirement plan in place – but less so if they are just using it as a savings pot to subsidise everyday expenses, as they might find there is not much left later in retirement.”
