Accredited official statistics

Private pension statistics commentary: July 2024

Updated 31 July 2024

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This publication is available at https://www.gov.uk/government/statistics/personal-and-stakeholder-pensions-statistics/private-pension-statistics-commentary

This publication is the annual update of HMRC’s Private pension statistics. This commentary presents information from Tables 2, 6, 7, 8 and 9, providing detailed statistics on the most recent data on personal pensions, annual allowance breaches, lifetime allowance breaches, taxable flexible pension payments and the estimated cost of pension Income Tax and National Insurance contribution relief.

Most of the tables in this release include figures using new outturn data for 2022 to 2023.

1. Statistical presentation

In the previously published September 2023 release of these statistics, some of the figures in Table 6 for the tax year 2021 to 2022 were estimated using projected rather than outturn data, due to delays in the ONS’s data validation process of the pensions data within the Annual Survey of Hours and Earnings (ASHE). In this new release of the publication all figures in Table 6 which depend on the ASHE dataset are now estimated using outturn data. Where applicable, previously published figures for the tax year 2021 to 2022 have been revised. More information can be found in the Background and Methodology.

Tables 9.1 and 9.2, which include breakdowns of taxable flexible payments from pensions by age and by gender, have been added.

2. Reported annual individual contributions to personal pension schemes

Table 2 includes individual contributions made to personal pensions and individual contributions made by self-employed members from 2013 to 2014 to 2022 to 2023. These figures include the basic rate relief claimed on these contributions.

From the September 2022 publication onwards, Table 2 no longer includes figures on employer contributions. This is because HMRC no longer requires schemes to report employer contributions. As a result, schemes reported a large decrease in employer contributions for 2020 to 2021.

When interpreting these figures, it is worth noting that members are concentrated among a small number of large schemes. Changes to these large schemes heavily influence the trends observed at an aggregated level. Schemes can amend their returns: therefore, this table can include revisions to historic years.

  • £12.8 billion of individual contributions were made to personal pensions in 2022 to 2023, up from £12.7 billion in 2021 to 2022

  • £2.3 billion of individual contributions were made by self-employed members in 2022 to 2023, remaining stable from £2.3 billion reported in 2021 to 2022

Chart 1: The value of individual contributions to personal pension schemes from 2013 to 2014 to 2022 to 2023

Chart 1 uses data from Table 2 and shows the value of individual contributions to personal pension schemes broadly increasing since 2013 to 2014. The value of individual contributions to personal pension schemes is the highest at £12.8 billion in 2022 to 2023, the most recent year in the chart. The chart also shows the value of individual contributions made by self-employed individuals from 2013 to 2014 to 2022 to 2023.

3. Reported number of members of personal pension schemes

Table 2 includes the number of members of personal pensions from 2013 to 2014 to 2022 to 2023. This table also includes the number of members who are self-employed. From 2018 to 2019 onwards member estimates only include those who have made individual contributions to personal pensions in the given tax year. Prior to this, estimates also included members who only had employer contributions made to their personal pensions or had no contributions in a given tax year.

  • the number of members making individual contributions to a personal pension has decreased to 6.8 million in 2022 to 2023 from 7.4 million in 2021 to 2022

  • the number of self-employed individuals making individual contributions to a personal pension has remained broadly constant in 2022 to 2023 compared to 2021 to 2022, at 340,000 in both tax years

Chart 2: The number of members and average individual contributions made to personal pensions from 2013 to 2014 to 2022 to 2023

Chart 2 uses data from Table 2 and shows the number of members contributing to personal pensions (rounded to the nearest 10,000), and the average (mean) individual contribution to personal pensions (rounded to the nearest £100). The number of members has fluctuated over the last 3 tax years presented, rising and then falling. From 2020 to 2021 to 2021 to 2022, the number rose by 9% from 6.8 million to 7.4 million. The number then fell by 9% to 6.8 million in 2022 to 2023. Average contributions remained broadly constant between 2020 to 2021 and 2021 to 2022, at £1,700 and then rose by 12% to £1,900 in 2022 to 2023.

4. The estimated cost of pension relief

Some of the figures in Table 6 for the tax years 2019 to 2020, 2020 to 2021, and 2021 to 2022 have been revised to include improvements to the methodology and the most recent outturn data available.

The figures for the Income Tax relief on Deficit Reduction Contributions (DRCs) in Table 6 have been presented as distinct values. Previously, in the September 2023 release of the statistics, the figures for Income Tax relief on DRCs were incorporated into the figures for Income Tax relief on employer contributions to net pay arrangements. This change does not affect Table 6.1, which still presents figures for the Income Tax Relief on employer net pay contributions, plus the Income Tax relief on DRCs. The change does not affect the Table 6 figures for Class 1 Primary and Class 1 Secondary NICs relief on employer contributions, which still include DRCs. The change does not affect Table 6.2, which presents figures for the Class 1 Primary and Class 1 Secondary NICs relief on employer contributions to net pay arrangements, plus the Class 1 Primary and Class 1 Secondary NICs relief on DRCs, respectively.

For the previous September 2023 release of these statistics, the figures for 2021 to 2022 which depend on the Annual Survey of Hours and Earnings (ASHE) were produced using a projected version of the ASHE data for 2020 to 2021, due to delays in the ONS’s data validation process. For this publication, all figures which depend on the ASHE dataset have been estimated using outturn data. More information can be found in the Background and Methodology.

4.1 Estimated cost of pension Income Tax and National Insurance contribution (NIC) relief

Table 6 includes an estimate of gross and net pension Income Tax and NICs relief and the elements used to calculate this for tax years 2019 to 2020 to 2022 to 2023. Gross pension Income Tax and NICs relief includes estimates of Income Tax relief on total contributions to registered private pension schemes, Income Tax relief on investment income of pension funds, and Class 1 primary and secondary NICs on employer contributions. Net relief is estimated by calculating gross relief less Income Tax on pensions in payment, annual allowance charges, and lifetime allowance charges.

  • gross pension Income Tax and NICs relief in 2022 to 2023 is estimated to be £70.6 billion, up from £68.1 billion in 2021 to 2022

  • Class 1 Primary and Class 1 Secondary National Insurance contributions (NICs) relief on employer contributions (including those made via salary sacrifice) is estimated to be £23.8 billion in 2022 to 2023, up from £22.6 billion in 2021 to 2022

  • Income Tax paid on payments from registered private pensions is reported to be £21.1 billion in 2022 to 2023, up from £19.5 billion in 2021 to 2022

  • the estimated net cost of pension Income Tax and NICs relief is estimated to be £48.7 billion in 2022 to 2023, up from £47.6 billion in 2021 to 2022

Chart 3: Estimated gross and net pension Income Tax and NIC relief, 2019 to 2020 to 2022 to 2023, £ billions.

Chart 3 uses data from Table 6 and shows gross Income Tax relief, NIC relief, pension tax charges and net Income Tax and NIC relief for 2019 to 2020 and 2022 to 2023. Net Income Tax and NIC relief is £48.7 billion in 2022 to 2023.

Chart 4: The estimated proportion of Income Tax relief on pension contributions and investment income in 2022 to 2023, £ billions

Chart 4 uses data from Table 6 and shows the split of Income Tax relief on pension contributions and investment income by the type of contribution for 2022 to 2023. Income Tax relief on employer contributions to net pay schemes is the largest type of Income Tax relief at £17.0 billion. Income Tax relief on self-employed contributions is the smallest type of Income Tax relief at £0.9 billion.

4.2 Pension Income Tax relief split by sector, scheme type and rate of relief

Table 6.1 includes the estimated Income Tax relief on individual and employer contributions split by relief mechanism, sector, scheme type and marginal tax rate.

  • in 2022 to 2023 68% of Income Tax relief on total pension contributions is estimated to be relieved on contributions to personal or private sector occupational schemes

  • in 2022 to 2023 54% of Income Tax relief on total pension contributions is estimated to be relieved on contributions to defined contribution schemes

  • in 2022 to 2023 37% of Income Tax relief on total contributions is estimated to be relieved at the basic rate, 56% at the higher rate and 7% at the additional rate

Chart 5: The estimated proportion of Income Tax relief on total pension contributions in 2022 to 2023 by the rate of relief

Chart 5 presents information from Table 6.1 of the statistics, showing that, in 2022 to 2023 it is estimated that 7% of Income Tax relief on total pension contributions was relieved at the additional rate of Income Tax, 56% at the higher rate, and 37% at the basic rate.

4.3 Pension National Insurance contribution (NIC) relief split by sector, scheme type and rate of relief

Table 6.2 includes the estimated Class 1 primary (C1P) and Class 1 secondary (C1S) NIC relief on employer contributions, including salary sacrificed contributions, split by relief mechanism, sector, scheme type and marginal NIC rate.

C1P NICs relief on employer contributions:

  • in 2022 to 2023 61% of C1P NICs relief on employer contributions is estimated to be relieved on contributions to personal or private sector occupational schemes

  • in 2022 to 2023 46% of C1P NICs relief on employer contributions is estimated to be relieved on contributions to defined contribution schemes

  • in 2022 to 2023 85% of C1P NICs relief on employer contributions are estimated to be relieved at the primary threshold rate and 15% at the upper earnings limit rate

C1S NICs relief on employer contributions:

  • in 2022 to 2023 66% of C1S NICs relief on employer contributions is estimated to be relieved on contributions to personal or occupational schemes in the private sector

  • in 2022 to 2023 50% of C1S NICs relief on employer contributions is estimated to be relieved on contributions to defined contribution schemes

5. Annual allowance

Table 7 includes the number of annual allowance (AA) charges reported to HMRC through Accounting for Tax (AfT) returns and Self Assessment (SA) returns. The table also includes the value of annual allowance charges reported through AfT, and the value of AA breaches (that is, the value of contributions in excess of the AA) reported through SA.

Excluding individuals who were affected by the public service pensions remedy (also known as McCloud – see below), all individuals are required to report contributions in excess of the AA through SA. This includes individuals who have used Scheme Pays (where the individual’s pension scheme pays some or all of the AA charge liability on the individual’s behalf, in return for an appropriate reduction in the individual’s pension benefits). However, not all individuals using Scheme Pays report through SA in practice. Individuals who have not used the Scheme Pays option, but have reported their breach through SA, will be included in the SA figures but not the AfT figures. There is also a lag between when AA charges are incurred and when they are reported in the AfT return. There are therefore differences between the AfT and SA figures. Furthermore, amendments have been made to the number and value of AA charges reported via both SA and AfT, therefore the figures published this year do not exactly match the figures published in previous years.

  • in 2022 to 2023, 32,540 individuals reported pension contributions exceeding their personalised AA through SA. This has decreased from 56,100 individuals in 2021 to 2022

  • the total value of contributions in excess of the AA that were reported via SA was £690 million in 2022 to 2023. This has decreased from £1.3 billion in 2021 to 2022. HMRC published guidance titled Changes in your annual allowance following the public service pensions remedy for individuals affected by the public service pensions remedy (also known as McCloud). Affected individuals were instructed to report any annual allowance charges for the 2022 to 2023 tax year through the Calculate your public service pension scheme adjustment service, rather than through SA. As anticipated, as a significant number of AA charges come from public service scheme members, this has contributed to the large year-on-year decline in the number and value of contributions in excess of the AA as reported by SA

  • in 2022 to 2023, 54,370 AA charges were reported by schemes through AfT returns. This has increased from 50,390 in 2021 to 2022

  • the total value of AA charges reported by schemes via AfT for tax year 2022 to 2023 was £344 million. This has increased from £326 million reported in 2021 to 2022

Chart 6: Number of AA charges and value of pension contributions in excess of the AA reported through SA, 2006 to 2007 to 2022 to 2023

Chart 6 presents information from Table 7, showing the number of individuals reporting AA charges through SA, and the total value of contributions in excess of the AA. Both the number of individuals and value of contributions increased between 2020 to 2021 and 2021 to 2022, but then decreased by a larger amount between 2021 to 2022 and 2022 to 2023.

The number of individuals reporting AA charges through SA increased by 27% between 2020 to 2021 and 2021 to 2022, while the value of contributions in excess of the AA increased 56%. Between 2021 to 2022 and 2022 to 2023, the number of reporting individuals decreased by 42%, and the total value of contributions above the AA decreased by 46%.

Chart 7: Number of AA charges and value of AA charges reported through AfT, 2012 to 2013 to 2022 to 2023

Chart 7 presents information from Table 7, showing the number and the value of AA charges as reported via AfT. Both the number and value of charges have risen each tax year between 2020 to 2021 and 2022 to 2023.

The number of AA charges reported through AfT more than doubled, increasing by 151% between 2020 to 2021 and 2021 to 2022, while the value of AA charges increased by 52%. Between 2021 to 2022 and 2022 to 2023, the number of reported charges increased by 8%, and the total value of AA charges increased by 6%.

6. Lifetime allowance

Table 8 includes the number and value of lump sum and non-lump sum lifetime allowance (LTA) charges reported through AfT returns. Lump sum breaches are charged at 55% and non-lump sum payments are charged at 25%.

  • in 2022 to 2023, a total of 13,080 LTA charges were reported by schemes through AfT returns. This is an increase from 11,720 LTA charges reported in 2021 to 2022

  • the total value of LTA charges reported by schemes in 2022 to 2023 was £516 million. This is an increase from £501 million in 2021 to 2022

Chart 8: Reported number and value of LTA charges through AfT from 2006 to 2007 to 2022 to 2023

Chart 8 presents information from Table 8 of the statistics, showing the total number and value of LTA charges paid by schemes through AfT returns has increased over the past 3 tax years. Between 2020 to 2021 and 2021 to 2022, the total number of LTA charges increased by 31%, and the total value of charges increased by 27%. Between 2021 to 2022 and 2022 to 2023, the total number of LTA charges increased by 12%, and the total value of charges increased by 3%.

7. Pension flexibility

Figures provided on taxable flexible payments from pensions are not comparable to those published before September 2023 due to methodological improvements. More information can be found in the Background and Methodology.

Table 9 includes the value of taxable flexibly accessed pension payments, the number of payments and individuals taking payments by quarter and tax year from Q2 of 2015 to Q1 of 2024. Figures disaggregated by age and gender are also included. Non-taxable elements of flexibly accessed payments are not included in this table as it is optional for schemes to report these to HMRC.

  • the total value of taxable payments withdrawn flexibly from pensions since flexibility changes were introduced in 2015 has exceeded £83.6 billion

  • in 2023 to 2024, £15.3 billion in taxable payments was withdrawn from pensions flexibly. This has increased from £12.9 billion in 2022 to 2023 and £11.2 billion in 2021 to 2022

  • between 1 January 2024 and 31 March 2024, £4.0 billion of taxable payments was withdrawn from pensions flexibly by 595,000 individuals across 1.4 million payments. The average taxable withdrawal per person was £6,800 in this period. There was a 17% increase in the value of payments withdrawn in this quarter compared to the same quarter in 2023, and a 15% increase in the number of individuals withdrawing

Chart 9: The reported value of taxable flexibly accessed payments and number of individuals accessing these payments by quarter from Q2 of 2017 to Q1 of 2024

Chart 9 presents information from Table 9 of the statistics, showing that the reported value of taxable flexibly accessed pensions and number of individuals accessing these payments generally falls in Q3 and Q4 and rises in Q1 and Q2. The value of withdrawals in 2024 Q1 was £4.0 billion withdrawn by 595,000 individuals. This total value is approximately equal to the peak in 2023 Q2, but a 17% increase on the same quarter in 2023.

7.1 Taxable flexibly accessed pension payments, split by age

Table 9.1 includes the value of taxable flexibly accessed pension payments, the number of payments and individuals taking payments by quarter and tax year from Q2 of 2015 to Q1 of 2024, split by the age of the individual withdrawing flexibly.

  • 42% of individuals who have received taxable flexible pension payments since flexibility changes were introduced in 2015 made their first withdrawal while aged 55 to 59. 28% were aged 60 to 64, and 20% were aged 65 to 69, at first withdrawal

Chart 10: The proportion of the reported value of taxable flexibly accessed payments paid to each age category by tax year from 2016 to 2017 to 2023 to 2024

Chart 10 presents information from Table 9.1 of the statistics (Reported taxable flexible payments from pensions split by age), showing the proportion of the value of taxable flexible pension payments paid to different age cohorts. Note that labels have been suppressed for categories making up less than 5% of the total value of taxable flexible pension payments. The proportions paid to individuals in all cohorts aged 64 and below (14 to 54, 55 to 59, and 60 to 64) have decreased over time, while the proportions paid to individuals in all cohorts aged 65 and over (65 to 69, 70 to 74, 75 to 80, 81+) have increased.

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In 2016 to 2017, 42% of the total value of taxable flexible pension payments was paid to individuals aged 55 to 59, and 29% was paid to those aged 65 and over. In 2023 to 2024, those proportions of the total value of taxable flexible pension payments were 30% for those aged 55 to 59, and 41% for those aged 65 and over.

7.2 Taxable flexibly accessed pension payments, split by gender

Table 9.2 includes the value of taxable flexibly accessed pension payments, the number of payments and individuals taking payments by quarter and tax year from Q2 of 2015 to Q1 of 2024, split by the gender of the individual receiving the payment.

  • in 2023 to 2024, £3.8 billion in taxable payments was withdrawn from pensions flexibly by women (25% of the total value), and £11.5 billion in taxable payments was withdrawn from pensions flexibly by men (75% of the total value)

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