Scottish Government

Indicators of progress: Definitions, data, baseline and trends information

Milestone 20: Increasing the proportion of working age people contributing to a non-state pension

Indicators

This milestone is measured by one indicator based on the percentage of people aged between 20 and state pension age who contribute to a non-state pension - either an employer's occupational scheme and/or a personal pension scheme. The data are taken from the Family Resources Survey, run by the Department for Work and Pensions (DWP), which surveys around 2,200 Scottish households each year. The size of the Scottish sample is being doubled as from survey year 2002/03, a measure which will help to reduce the level of sampling variation in the data.

This indicator was redefined in 1999/00 to monitor the proportion of all working age people (aged 20 and over) who contribute to non-state pension(s). Previously the indicator monitored the proportion of those in employment only. The new indicator is more comprehensive and is not subject to perverse results as the denominator changes over the economic cycle. The trend is similar to the previous definition although the proportions are lower.

Availability of data

The information on this milestone is available at Scotland level and can be split by gender, by age and by whether someone has a long-standing illness, disability or infirmity which limits their daily activities. Owing to the current sample size, information is not available by ethnicity or sub-Scotland regions.

There is a discontinuity in the time series for this indicator due to a change in the questions relating to non-state pension contributions in the Family Resources Survey. From 1994/95 to 1998/99, the indicator counts individuals who "belong to a company pension scheme" or "currently have a personal pension" at the time of the survey. In 1999/00, the question was changed and the indicator now counts individuals who "are contributing to a company/occupational pension" or "are contributing to a personal/private pension". Under the old definition, people were included who had a pension scheme but were not currently contributing. These people are excluded from the new definition and therefore it is not valid to compare the two sets of figures.

Since the publication of last year's report, DWP have made some methodological changes to the FRS data. As a result of these changes, some of the figures in Tables 20a to 20c may differ slightly from those published in the last report. These differences are, however, very small and do not alter any of the general trends. As part of an ongoing programme to improve data quality there will be further revisions to this data series when full results of the 2001 Census become available.

Working age people contributing to a non-state pension

Due to the discontinuity noted above, it is not possible to analyse the trend in this indicator across the whole period. In 2000/01, 43 percent of all working age people were contributing to a non-state pension compared to 61 percent of all employees - both of these show a slight drop on the levels of 1999/00. It is clear that men are more likely to contribute to non-state pensions than women.

Table 20a : Proportion of working age people contributing to a non-state pension by gender, 1999/00 & 2000/01

Source: Family Resources Survey: Department for Work and Pensions

Tables 20b and 20c show the trend in the years preceding the discontinuity and are shown as background data only. Between 1994/95 and 1998/99, there was evidence to suggest that there had been an increase in the percentage of women contributing to a non-state pension. The overall trend over this period is broadly constant.

Table 20b : Proportion of working age people by gender contributing to a non-state pension, 1994/95 to 1998/99

Source: Family Resources Survey: Department for Work and Pensions

Table 20c : Proportion of working age people (employees) by gender contributing to a non-state pension, 1994/95 to 1998/99

Source: Family Resources Survey: Department for Work and Pensions

Age analysis

In 2000/01, 34 per cent of working age people aged between 20 and 34 were contributing to a non-state pension (Table 20d). The proportion of people in the age group 50 to retirement age was broadly similar. However, more than half of persons aged between 35 and 49 were contributing.

As expected, for each age group, the proportion of employees contributing to a non-state pension is greater than the corresponding proportion for all working age people. It is in the 50 to retirement age group where this difference is most marked, illustrating that a greater proportion of this age group are not in employment.

Table 20d : Proportion of working age people contributing to a non-state pension by age group, 1999/00 & 2000/01

Source: Family Resources Survey: Department for Work and Pensions

Tables 20e and 20f show the trend in the years preceding the discontinuity and are also shown as background data only. Between 1994/95 and 1998/99, there was evidence to suggest that there had been an increase in the percentage of working age people contributing who were aged 50 to retirement age. For employees, the trend over this period is broadly constant for each age band.

Table 20e : Proportion of working age people by age group contributing to a non-state pension, 1994/95 to 1998/99

Source: Family Resources Survey: Department for Work and Pensions

Table 20f : Proportion of working age people (employees) by age group contributing to a non-state pension, 1994/95 to 1998/99

Source: Family Resources Survey: Department for Work and Pensions

Disability analysis

Table 20g shows how the proportions for both working age persons and employees vary by whether or not someone has a longstanding illness, disability or infirmity which limits their activities.

For employees, the proportion contributing to a non state pension is only slightly lower for persons whose activities are limited than it is for persons whose activities are not limited. However, for all persons, the proportion is noticeably lower for those whose activities are limited. This is as expected due to the fact that a high proportion of persons with a longstanding illness, disability or infirmity which limits their activities, will be unable to work.

Table 20g : Proportion of working age people contributing to a non-state pension by status, 1999/00 & 2000/01

Source: Family Resources Survey: Department for Work and Pensions