1 in 3 UK workers don’t have a pension


A new survey from Prudential has found that a staggering 15 million UK workers don’t have a pension to provide them with an income in retirement.

The survey found that one in three workers will have to rely on the state pension or other means to provide an income in retirement in the absence of either a Personal Pension or a company pension.

Prudential surveyed 1,600 people and found that women were less likely than men to be paying into a pension; 40% of the women surveyed said they were not paying into a pension, compared to 30% of men.

The pension crisis facing this generation was put into focus in a report published this summer by the Workplace Commission. The report warned that up to 14 million workers will retire with pensions of less than their parents. Author of the report, Lord McFall of Alcluith, warned that: “A golden sunset is giving way to a bleak dawn.”

Tax relief

One of the advantages of saving into a pension is the tax relief which contributions attract, people not paying into a pension are therefore missing out on ‘free money’.

Vince Smith-Hughes, head of business development, at Prudential said: “Failing to save into a pension means not only having to rely solely on the state pension in retirement, but also missing out on the ‘free money boosts’ which come with pensions, such as tax relief and employer contributions.”

He continued: “Making regular pension contributions is a vital part of securing a comfortable retirement. Although saving for retirement may not be a priority for young people, the more money which is stashed away from an early age, the more likely that significant rewards will be reaped later in life.”


The lack of pension provision for the current generation could be down to a number of reasons.

Firstly a lack in trust, many people feel poorly served by the pensions industry and some who have been disapointed by the way their pension has performed may have stopped contributions. Secondly the recession and tough economic times in which we still live in may have caused a number of people to revaluate their  current financial priorities and take time out from making pension contributions so they can meet the cost of day to day living. Both these sets of people are missing out on valuable tax relief and perhaps equally valuable employer contributions. Finally over recent years some people have looked to other ways of providing an income in retirement, for example buy to let investments, and different forms of savings, for example ISAs.

Auto enrolment

In an effort to compel workers to pay into a pension the government will introduce auto enrolment over the next few years. Employees will be automatically enrolled into a workplace pension and employers will also have to contribute. The new system will be rolled out between 2012 and 2016, and the exact start date depends on the size of the employer. Whilst the employee may opt out it is hoped that auto enrolment will help to reduce those people without a pension.