The DWP has published ‘Workplace pension participation and saving trends. Whilst participation in public sector pensions is largely unchanged, the story is different in the private sector;
£3.1 billion extra was saved in 2014 than the previous year, totalling an annual contribution of £42.9 billion. 21% increase in private sector pension participation, now 63% of employees are in their company plan. Increase in younger members of private sector workplace pensions – the largest increase in participation was seen in the 22 to 29 age group, increasing from 30 per cent in 2013 to 54 per cent participating in 2014.
Low paid workers are also saving for retirement – those earning between £10,000 and £20,000 saw an increase in participation between 2012 and 2014 from 21% to 50%.
The success can chiefly be attributed to auto-enrolment as the largest increase in participation between 2013 and 2014 was in schemes for employers of 250-4,999 employees. Private sector schemes saw a 31 percentage point increase to 84 per cent of eligible employees participating. These increases coincide with the auto-enrolment staging date (start date) for these employers.
Nathan Long – Head of Corporate Pension Research at Hargreaves Lansdown;
‘Auto-enrolment has really delivered a shot in the arm to saving in private sector workplace pensions. The large increase in participation in young and low paid workers is particularly pleasing. Thought must now turn to ensuring these people who are new to pensions are given the help they need to make confident decisions when they come to retirement.’