Finance and insurance professional's employer pension contributions average 9.5% - the highest among 17 industries offering defined contribution (DC), according to Profile Pensions.
Its analysis revealed exclusively to PP, showed this was the case based on an average UK employee salary of £30,403. The education sector's employer contributions came in close second, at an average of 9.3% based on a salary of £22,146. For those working in electricity, gas, steam, and air-conditioning supply, contributions rested at 7.1% based on a £23,943 salary average.
On the other end of the scale, agriculture, forestry and fishing jobs offered contributions of 2%, accommodation and food services offered 2.1%, and the arts industry offered 2.5% on average.
The findings were based on the latest available data from the Office for National Statistics in 2018, which provided annual estimates of the proportion of UK employees in employer contribution bands. At this point in time, minimum employer contributions were 2%, with 3% employee contributions. This rose to a total of 8% in April, with minimum employer contributions rising to 3%.
The industry list in the analysis included 0% contribution bands, which was likely to be employees not eligible for higher pension bands, due to their age or working hours, Profile Pensions said. Additionally, each band was treated as an average of the range, and then used in a weighted average -the number of jobs in each band - to provide an overall average.
Other industries analysed included mining and quarrying; manufacturing, information and communication; professional, scientific and technical; transportation and storage; water supply; sewerage, waste management and remediation; wholesale and retail trade; real estate; construction; human health and social work; administrative and support services; arts, entertainment and recreation, and accommodation and food.
Overall, men received 0.2% contributions more than women on average at 4.6%. However, in some industries women received higher contributions such as education where average contributions were 9.3% for women and 7.9% for men.
In roles such as electricity, steam and air conditioning supply men received 3.2% higher contributions on average at 7.4% compared with 4.2% for women. In manufacturing, there was a difference of 0.9% with average contributions resting at 5.3% for men.
Profile Pensions chief investment officer Michelle Gribbin said the difference between industries is "remarkable".
She continued: "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 administration."
She also said that generally, women are more likely to have lower incomes and more interrupted careers because of their caring responsibilities.
"Ensuring this doesn't penalise them is as much of an organisational culture issue as it is a government policy issue.
"Firms should really start to get to grips with the fundamentals and fully adopt a policy of 'equal pay and pension contributions for equal roles', applied to both full time and part time workers. As a further step, firms regularly reporting on gender disparities in income and pension contributions really helps ensure good transparency and commitment on this issue."
Furthermore, Gribbin noted her support for employers offering matching contributions for employees who are committed to growing their pension.
"Employers offering such benefits to members shows a real investment in employees' financial futures and promotes more people saving adequately for their retirement."
Newton’s Curt Custard considers the investment outlook for 2021 and the implications for DC schemes
Master trusts’ investment strategies have grown and become more sophisticated over the last three years, but “growing pains” are hindering progress, according to the Defined Contribution Investment Forum (DCIF).
More than half of BlackRock’s flagship UK defined contribution (DC) default fund’s assets will be invested in ESG strategies by June 2021.
Graeme Bold says the right communications can improve both the level of savings and the outcomes for savers.