- Study finds how employer contributions to pensions vary based on industry, type of employment, and gender
- Financial and insurance sectors are the best option, but education follows closely behind
- Gender stereotypes still play a role with women in education receiving 1.4% more while men in technical trade roles are up by 3.3%
Retirement plans are commonly better supported by workplace pensions than by the State Pension. But while auto-enrolment is a legal requirement for most,1 the differences in employers contributions can prove a major factor in comfort during retirement.
Research from Profile Pensions finds which industry’s employers offer the highest level of contributions – that is, how much they pay into pensions as a percentage of salary, including how that differs by gender.
No Tension Pensions
With a target pot of £38,000 to live modestly in retirement, and £247,000 to live comfortably, retirement planning is a crucial financial consideration across all industries. These sectors, however, offer the best pension planning with high contributions from employers:
- Financial and insurance work – With employer contributions of an average of 9.5%, finance is the best industry for getting support – and with an average salary of £30,403, it’s one of the best-paying options around. With 54,446 jobs on the market in the UK, there are a lot of opportunities going around.
- Education – Teachers are among those with the best pension options, with average contributions of 9.3%. The average salary of £22,146 means those contributions reach an average of £2,053.60 annually. Teachers are also in high demand, with 102,805 job openings available.
- Electricity, gas, steam, and air-conditioning supply – Significantly lower than the prior two industries with average contributions of only 7.1%, this industry’s £23,943 average salary only results in contributions of £1,703 – though this is still among the top options.
At the other end of the scale, however, agriculture, forestry and fishing jobs offer the minimum legal contribution – 2% – while it’s scarcely more in accommodation and food services, at 2.1%. The third worst is the arts, where it reaches only as high as 2.5% on average.
The Gender Gap
While overall there was a slightly higher contribution rate for men than women – at 4.6% compared with 4.4% – in individual industries the range varies significantly.
The average difference in industries was marginally in favour of women, though only by 0.1%. Education, in particular, favoured women, with an average employer contribution of 9.3%, while men received only 7.9%.
In technical areas, however, men saw higher contributions. In electricity, gas, steam, and air-conditioning supply, for example, they saw 3.3% higher contributions, at 7.4% compared with 4.2%, and in manufacturing, there was a difference of 0.9% (5.3% to 4.4%).
Michelle Gribbin, Profile Pensions’ Chief Investment Officer, said: “The difference between industries is remarkable. While some you might expect, like financial and insurance industries, the high pensions in education mean teachers are likely to be better off in retirement than those in careers like social work or admin.
“Our hope for this study is that it prompts those in all industries to start thinking about their pension – are the contributions you’re making enough to support you when you retire?”
For more of the best and worst industries for your pension pot, have a look at the full study on Profile Pensions.