More than three-quarters (78%) of eligible employees saved into a workplace pension in 2016, compared to 75% in 2015, according to research by the Department for Work and Pensions (DWP).
Its Workplace pension participation and savings trends of eligible savers official statistics: 2006 to 2016 report, which is based on analysis of members of all qualifying workplace pension schemes, also found that eligible employees saved a total of £87.1 billion in 2016, an increase of £3.8 billion on the amount saved in 2015.
The research also found:
- 73% of eligible employees working in the private sector saved into a workplace pension in 2016, representing a 31 percentage point increase since 2012.
- 92% of eligible public sector employees saved into a workplace pension in 2016. This represents an increase of four percentage points since 2012.
- 89% of eligible employees who work for a private sector organisation with 5,000 or more staff participated in a workplace pension in 2016.
- 79% of eligible employees who work full time saved into a workplace pension in 2016, compared to 73% of eligible employees who work on a part-time basis.
- 89% of eligible public sector employees aged between 22 and 29 years old saved into a workplace pension in 2016, an increase of nine percentage points since 2012.
- 68% of eligible private sector employees aged between 22 and 29 years old saved into a workplace pension in 2016, compared to 24% in 2012.
- Employee contributions accounted for 30% of the total amount saved into workplace pensions in 2016, employer contributions made up 60% of the total, and tax relief accounted for the remaining 10%.
- 77% of eligible employees saved into a workplace pension in at least three of the last four years, which is two percentage points lower than in 2015.
Lee Hollingworth, head of defined contribution (DC) at Hymans Robertson, said: “Auto-enrolment has been a fantastic initiative in getting people starting to save towards a pension. It is really encouraging to see the sharp increase in participation since its introduction. But there’s a real danger of a missed opportunity to build on what has been started if the government doesn’t act now to engender higher saving rates.
“As a nation we are still massively under-saving for retirement. Auto enrolment has been a commendable start but we need to go further.”
Jeanette Makings, head of financial education at Close Brothers, added: “The introduction of auto-enrolment was a significant milestone for savers in the UK, one that these figures prove has been instrumental in increasing pension contributions since 2012, but we can’t rest on our laurels. Now this initial foundation has been laid, it’s more important than ever than employers are effectively communicating the benefits of pension saving to those who have yet to opt-in, and to encourage staff now part of a pension scheme to contribute more than the bare minimum to build their pension pots.
“With a multitude of long-term saving options now available, the financial landscape has never been more complex to navigate. Employers can, therefore, play a pivotal role in equipping the UK’s workforce with the tools and support it needs to improve understanding and make the best savings choices, whatever their age, career stage or personal circumstances. ”