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Managing my investments
Managing my investments

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5.1 Investing for a pension

A central and vital part of investment activity relates to investing in pension schemes to produce an income stream in retirement. How does the UK fare when it comes to this vital activity?

Table 5.1 sets out the percentages of adults in the UK who were active members of pension schemes in 2016–18. The data, compiled by the Office for National Statistics (ONS), does not provide an overall picture, since the numbers will not include those who were members of schemes but have deferred receipt of pension benefits. The data also excludes those who have retired already and who are drawing pension income. Additionally the data does not reflect those that are simply investing in assets outside a formal pension scheme to provide for their retirement.

Table 5.1 Pension scheme participation 2016–18 (% of those aged 16 years to state pension age in Great Britain)
Scheme Males Females
Occupational defined benefit (1) 24% 28%
Occupational defined contribution (1) 26% 20%
Personal pension (1) 10% 6%
Total in pension scheme(s) (2) 56% 50%
(Source: Office for National Statistics (ONS), 2019a)


(1) The differences between defined benefit and defined contribution schemes are explained in the coming sections. Personal pensions are explored too.


(2) The total for each gender is higher than the sum of the different types of pension schemes are some adults were in more than one scheme.

Notwithstanding these limitations, the data points to a worrying conclusion – that a significant proportion of adults are not making their own provisions for retirement and may, as a consequence, become entirely reliant on their state pension when they do retire. The situation was little changed by 2021/22 with the participation in pension schemes amongst working-age adults being 55% for males and 52% for females (DWP, 2023).’

On a more positive note the percentage of adults – both male and female – participating in a pension scheme has been growing in recent years. One reason for this has been the introduction of automatic enrolment onto ‘workplace’ pension schemes that was rolled-out in stages in the UK in the 2010s.