Workers in the tourism sector: examining their private pension savings, Great Britain, July 2012 to June 2014

69% of tourism workers in Great Britain do not have any private pension savings.

There are proportionally fewer workers in the tourism sector with private pension savings compared with 10 other main industries (31% and an average of 51% respectively).

Workers in the accommodation or food and drink services industries were less likely to have a private pension than those working in passenger transport or leisure-based industries (25% and 24% to 38% and 41% respectively).

45% of males who work in “Culture, sport and recreation activities” have private pension savings, which is the largest proportion out of all the industries within the tourism sector.

This article is part of a series of short stories on employment in the tourism sector. It aims to explore the trends in the private pension savings of tourism workers in Great Britain and includes a comparison with other sectors of the economy.

The following points are important to bear in mind when reading and drawing conclusions from this analysis:

• “pension wealth not yet in payment” (referred to as “pension savings” throughout this article) is the amount of wealth that someone has saved in a private pension that they have not yet used for an income in retirement

• pension wealth not yet in payment also includes retained pension savings from a former employer, meaning that a worker in the tourism sector could have retained pension savings from previous job(s) in different sectors and that would be included in this analysis

• this article analyses private pension savings and does not include state pension wealth

• the analysis has only been performed on tourism workers aged 22 years and over

• the tourism sector is primarily made up of 4 groups of industries: accommodation services, food and drink services, passenger transport (including vehicle hire and travel agents) and leisure activities (including cultural, sport and recreational); the “tourism sector” refers to these 4 groups

• please see Annex A for the Standard Industrial Classifications (SIC) that make up the tourism sector definition and Annex B for the SIC definition of the other sectors used

There were approximately 2.3 million workers who are over 22¹ and employed in the tourism sector in Great Britain in 2013. Of which:

• 54% are male and 46% are female (compared with 53% males and 47% females in non-tourism industries)¹

• 66% are full-time and 34% are part-time (in comparison with 74% of workers being full-time in non-tourism industries and consequently 26% part-time)¹

• 26% are aged 22 to 29, compared with 17% of workers in non-tourism industries¹

Table 1 shows the percentage of these workers employed in the 4 main industry groups of the tourism sector. The largest proportion of tourism workers are in the food and beverage serving activities industry.

Various factors can impact the pension savings of tourism workers including: age, sex, typical working hours and the tourism industry an individual’s job is classified into. Each factor can impact the pension savings of tourism workers in different ways and, therefore, should be taken into account when interpreting the results. For example, in general part-time workers will accumulate fewer private pension savings in comparison with full-time workers.

Notes for: Who works in the tourism sector?

1. Annual Population Survey 2013.

The purpose of this section is to explore the “type” of tourism workers who hold a private pension.

Overall, approximately 31% of tourism workers have a private pension, which is less than 710,000 out of a total 2.3 million tourism workers. Figure 1 shows how different demographics of tourism workers affect whether or not they have private pension savings. It shows that:

• males are more likely to have a pension than females (37% compared with 26%)

• full-time workers are more likely to have a pension than part-time workers (37% compared with 21%)

• those who work in the accommodation or food and drink services industries are less likely to have a pension than those who work in passenger transport or leisure-based industries (25% and 24% compared with 38% and 41% respectively)

The median private pension savings of tourism workers, regardless of sex or the sector in which they work, is £0. Of all tourism workers, 31% have private pension savings, which means that 69% of workers in the tourism sector will have £0 of private pension savings when they retire (unless they begin to contribute).

Table 2 shows that a quarter of females in the tourism sector hold private pension savings compared with 37% of males. It should be noted that in the “Food and beverage serving activities” sector, over 40% of employees are part-time¹. Therefore, it is not surprising to see that only 21% and 28% of female and male workers respectively hold any form of private pension savings. Within the accommodation industry, there is a large difference between the proportion of females and males who have pension savings: 20% and 36% respectively. Table 2 shows that 45% of males and 37% of females who work in “Culture, sport and recreation activities” have private pension savings, which is the largest percentage out of all the industries within the tourism sector.

However, focusing solely on the median hides the trends for workers who hold a low or high amount of private pension savings. Of the 31% of tourism workers that do have pension savings, the amount they have varies greatly across the 4 main sectors and is also dependent on their sex.

Figure 2 shows the distribution of the private pension savings of tourism workers by the industry they work in and by their sex. The most stark sector is “Passenger transport (including vehicle hire and travel agents)”, where the top 10% of males who hold pension savings have more than £264,000 stored for retirement. The industry in which females hold the most pension savings is “Culture, sport and recreation activities”; females with the highest 10% of pension savings hold more than £84,000. It should be noted that these are fewer pension savings than a male would hold in the same industry, but significantly more than females hold in other industries.

Across all the sectors considered, Figure 2 shows that within the same tourism sectors, of the males and females who have pension savings, males have a higher amount of pension savings than females. An individual's contributions into a private pension is linked to their income, therefore income inequalities between demographic characteristics are likely to be reflected in pensions savings, for example differences between sexes.

Notes for: The private pension savings of workers in tourism industries

1. Annual Population Survey 2013.

The sectors defined here are based on Standard Industrial Classification definitions and more information on their definitions is contained in Annex B.

Figure 3 shows the percentage of workers with private pension savings in 11 different sectors, including the tourism sector. As shown, the proportion of tourism workers with any pension savings is the lowest of the 11 industries (31%), followed by "Agriculture, forestry and fishing" workers (of which, 34% have pension savings) and "Wholesale and retail trade" (39% of workers have pension savings). At the other end of the scale, more than 70% of workers in “Financial and insurance activities” have pension savings and in “Public and administrative defence” and “Information and communication”, the percentage of workers who have pension savings is 69% and 65% respectively.

As in the previous section, the distribution of private pension savings has been examined to try and establish a fuller picture of the distribution of pension savings within the sectors. It should also be noted that only the pension savings held by full-time workers in these sectors have been looked at.

Figure 4 shows the distribution of the private pension savings of full-time workers in the same 11 sectors. The chart shows that workers in the tourism sector have a lower amount of pension savings in comparison with most other sectors. Exploring this in more detail, the amount of pension savings that 90% of workers in the tourism sectors hold is the lowest out of all the sectors.

Further information about the Annual Population Survey is available from the Annual Population Survey Quality and Methodology Information.

This contains important information on:

• the strengths and limitations of the data and how it compares with related data

• users and uses of the data

• how the output was created

• the quality of the output including the accuracy of the data

Further information about the Wealth and Assets Survey is available from Wealth and Assets Methodology.