As restrictions on normal life reduced spending this year, new figures from interactive investor suggest that people were using savings to significantly boost their pension contributions, with the highest increase among those in their thirties and forties.
Between January and October 2020, there was a 34.7% rise in the average value of Self-Invested Personal Pension (SIPP) contributions compared to the same period last year among 30 to 39-year olds. There was another big rise in the average value of contributions of 18.3% between the same periods among 40 to 49-year olds, according to the data from ii, the UK’s second biggest DIY investment platform.
The average contribution rise among 50 to 55-year olds was smaller, at 6.8%. Meanwhile the youngest and oldest age groups contributed slightly less this year, with a fall in average contributions of 0.3% for those aged 18 to 29 between January to October 2019 compared with 2020 and a fall of 3.6% for those between 56 and 65 years old.
Becky O’Connor, Head of Pensions and Savings at interactive investor, said: “Our SIPP figures show a significant rise in contributions this year. This suggests that people in their thirties and forties were being sensible with the money they were saving during lockdown and squirreling it away for the long term.
“It’s positive to see these younger investors not afraid to up their investments and take advantage of lower stock prices after the initial crash. Whereas older groups, from this data, appear to have been more cautious.
“Households in the UK stand to save £748.70 over the course of the next month-long lockdown starting this Thursday, according to interactive investor’s analysis of ONS household spending data, with the biggest savings to be made from travelling less and not eating out.”