New analysis of more than 240,000 PensionBee customers reveals a substantial rise in average pension pot sizes across the UK, increasing by 16% from £17,379 in March 2023, to £20,077 in March 2024.
Average pot size by region
Savers in the North West experienced the biggest increase in their pension wealth, with their average pot size rising by 18% from £13,270 in March 2023, to £15,651 in 2024. However, residents in the South East continued to save the most into their pensions, with an average pot size of £25,734, surpassing the national average by 28%.
In Greater London, the average pension pot stood at £23,393, exceeding the national average by nearly a fifth (17%). This could be attributed to London having the highest average weekly income in the UK.1
Gender pension gap
The gender pension gap remained a persistent issue across all regions. Women in Northern Ireland face the largest gender pension gap at 44%, with average retirement savings for men totalling £16,390, compared to £13,844 for women.
In London, although the gap is lower (29%) than the government’s national gender pension gap figure (35%), men’s retirement savings total £26,646, compared to women who saved £18,786. This relatively narrower gap in comparison to other regions may be attributed to the fact that London offers the highest average salary for women in the UK.2
Expected pension pot at retirement
Further PensionBee analysis predicted the expected retirement pots of different age groups, based on certain assumptions.3 This analysis found that savers under 30 are expected to retire with larger private pensions than their older counterparts. On average, those under 30 could retire on a pot worth £195,058 by the time they reach 66, owing to the accumulation of multiple pensions over their working lives and having a longer period still left to save.4
Meanwhile, those nearest to retirement (aged 50+) look set to retire with less, on an average pension pot of £87,887 by the time they reach 66, despite having more pressing financial needs.
Becky O’Connor, Director of Public Affairs at PensionBee, commented: “Pension perseverance is paying off.
Savers are diligently building their pots and appear to be prioritising pensions more than ever. This is great news for the retirement prospects of today’s workers, especially the younger cohort who will benefit from being under auto enrolment for most of their working lives.”
Notes to Editors
The findings relate to defined contribution pensions and some older savers fortunately continue to have access to defined benefit company pensions.
Further regional breakdowns are available on request.
Appendix
Table 1: Average pension pot size by region
Source: PensionBee, May 2024. Total sample size of the UK Pension Landscape is 240,325 customers as at March 2024.
Table 2: Gender pension gap by region
Source: PensionBee, May 2024. Total sample size of the UK Pension Landscape is 240,325 customers as at March 2024.
Table 3: Expected pension pot in retirement
Source: PensionBee, May 2024. Total sample size of the UK Pension Landscape is 240,325 customers as at March 2024. We’ve assumed the pension grows at an annual rate of 5% and that, based on our most popular plan, Tailored, annual charges are 0.70%. Average monthly contributions are based on the minimum required contribution of 8% of qualifying earnings for Auto-Enrolment. Average salaries are taken from HMRC’s national statistics on the distribution of income, and it is assumed that individuals will receive a 2% salary increase per year. Inflation reduces the rate of return. All calculations are based on the average age for the entire group, and it is assumed that the retirement age is 66.
Footnotes
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- We’ve assumed the pension grows at an annual rate of 5% and that, based on our most popular plan, Tailored, annual charges are 0.70%. Average monthly contributions are based on the minimum required contribution of 8% of qualifying earnings for Auto-Enrolment. Average salaries are taken from HMRC’s national statistics on the distribution of income, and it is assumed that individuals will receive a 2% salary increase per year. Inflation reduces the rate of return. All calculations are based on the average age for the entire group, and it is assumed that the retirement age is 66.
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