More than £80bn was saved into workplace pensions in 2014, up almost £3bn on 2013, according to the Department of Work and Pensions (DWP).
Its Automatic enrolment evaluation report 2015 found that private sector workplace pensions accounted for £43bn of this, while the public sector accounted for £37bn.
The report also found:
- In 2014, there was an 18% increase in the number of workers earning between £10,000 and £20,000 a year participating in a workplace pension.
- 60% of staff aged between 22 and 29 participated in a workplace pension scheme in 2014, an increase of 19%.
- In 2014, private sector employees saved an average of £4,673 a year into their pension, compared to £6,370 in 2012.
Nathan Long, head of corporate pension research at Hargreaves Lansdown, said: “Auto-enrolment has boosted pension membership across the board but particularly so amongst the young and low paid who historically were the least likely to join their workplace pension. While the amount saved has dipped, this will self-correct when the legislation is fully rolled out and minimum contribution levels hit 8% in 2018.
“Educating staff about the importance of pension saving remains a top priority as illustrated by the 3% drop out rate of members after they are in and contributing to their pension.”
Adam Bexson, health and wealth consultant at Barnett Waddingham, added: “While the findings around more workers saving is good news (and especially in lower age groups where we really needed a focus on starting to think about retirement income), it is worrying to see the amount saved per individual fall, on average, by a significant amount, £6,370 in 2012 compared to £4,673 in 2014.
“My concerns remain regarding smaller employers’ ability to cope with auto-enrolment. The report states that awareness remains high, but what does this mean? Just because an employer is aware of auto-enrolment doesn’t mean that they understand how much preparation is needed, or that they are fully prepared.”