New research from leading online pension provider, PensionBee, reveals that 59% of fully remote workers would consider adding extra savings as a result of home working into their pensions.
Following the latest government guidance, a large number of UK workers will now be fully remote again and could see additional savings as a result. PensionBee analysis reveals fully remote UK workers are most likely to save up to £25 on food/drink per week and £26-50 on transport per week due to being at home. However, the same analysis also found that fully remote UK workers are most likely to have also faced increased bills (such as heating) of up to £25 per week.
Of those workers thinking about making additional contributions, nearly a third (29%) reported that they might put up to 15% of their remote working savings into their pension, whilst almost a quarter (23%) would put in between 21% and 30%. A small proportion of respondents (4%) even said they would add 100% of their savings into their pension.
Based on the assumption that home working can save the average worker £38 per week or £1976 per year (1), contributing just 8% (£158) (2) of these annual savings could see an increased pension value of over £12,000 after 25 years (3). Similarly, contributing 18% (£356) of these annual savings could boost a retirement fund by almost £30,000 in later life, while adding 41% could produce additional pension savings of more than £67,000 at retirement.
Most notably, if a saver contributed all of their remote working savings for the year (£1,976), they could boost their pension balance by over £166,000 after 25 years.
Romi Savova, CEO of PensionBee, commented: “Remote working has become a well-established norm for UK office workers, with many benefitting from the unique opportunity to make significant savings in their everyday lives. While it might be tempting for workers to spend the extra savings on short-term endeavours, our research indicates that by utilising even a small amount of these additional savings to boost their pensions, workers could find themselves in a much-improved position for their eventual retirement.”
Appendix
Table 1: Attitudes towards adding remote working savings into pension pots
Source: PensionBee, December 2021. 250 fully remote workers. Numbers have been rounded.
Table 2: Attitudes towards the amount of remote working savings that could be added into pension pots
Source: PensionBee, December 2021. 149 fully remote workers who would consider putting extra savings into their pensions. Numbers have been rounded.
Table 3: Amount saved on food and drink per week by remote working
Source: PensionBee, December 2021. 250 fully remote workers. Numbers have been rounded.
Table 4: Amount saved on transport per week by remote working
Source: PensionBee, December 2021. 250 fully remote workers. Numbers have been rounded.
Table 5: Amount incurred on additional bills per week by remote working
Source: PensionBee, December 2021. 250 fully remote workers. Numbers have been rounded.
Table 6: Estimated impact of making additional pension contributions from remote working savings
Source: PensionBee data. Weekly remote working savings are estimated to be £38. Assumed pension growth of 7% pa over 25 years, with an annual management fee of 0.5%.
Footnotes
- Calculated by combining the midpoints of the most likely food/drink and travel savings per week, then subtracting the midpoint of the most likely expenditure on increased bills per week to reach an average number.
- Contribution rates of 8%, 18% and 41% are used as these are the midpoints for the most popular amount of remote working savings that respondents would consider adding to their pension.
- Assumed pension growth of 7% pa over 25 years, with an annual management fee of 0.5%.
