The UK appears to be paying less money into personal pensions each year, with just £18bn contributed in the 2013/14 tax year, HMRC data has shown.
This was lower than the £19.5bn in 2012/13 and below the peak of £20.9bn contributed in 2007/08 ahead of the financial crisis and downturn in the UK economy.
The latest Personal Pension Statistics report also said the proportion of payments contributed by employers has risen consistently from around 9 per cent in the early 1990s to 56 percent in 2013/14.
The 28-page report said: “In the mid to late 1990s individuals’ personal pension contributions peaked at around 68 per cent, with employers accounting for a further 9 per cent, and minimum contributions accounting for 23 per cent.
“Thereafter the balance has switched, with contributions from individuals and minimum contributions both declining proportionately in favour of contributions from employers.”
According to the study, the number of individuals contributing to personal pensions increased by almost 1m in 2013/14 from the previous year, likely as a result of auto-enrolment.
Meanwhile yearly average contributions per individual grew consistently up to 2011/12 (£3,690 an individual), before falling to £2,840 for each individual in the most recent year.
Dave Books, technical director at London-based Broadstone, said the government should move to a single tax relief rate for pension contributions to DC schemes to incentivise saving.
He criticised the government’s consultation on pension taxation, claiming it gave the impression of wanting to simply accelerate further the tax take from pensions.
He said: “This will not only make it easier for pensioners to spend their pension benefits, but will simultaneously reduce the level of tax relief given to those saving for their retirement.
“This gives rise to a level of cynicism in the government’s attitude to sustainable long term retirement savings.”
According to the HMRC report, gross pension tax relief in 2013/14 is projected to be £34.3bn, down from £35.1bn in 2012/13.
It said: “Recent reductions in the annual and lifetime pensions tax allowances are expected to be the main cause of flattening and now falling gross cost of pensions tax relief since 2010/11.”
Tim Rodgers, a chartered financial planner with Leicestershire-based TM Asset Management, said: “Our clients are maximising their contributions so we have not seen a drop in pensions contributions.”