88% of employees participated in workplace pensions during 2019

Overall, 88% of eligible employees (19.2million) participated in a workplace pension in 2019, an increase from 87% in 2018, according to research by the Department for Work and Pensions (DWP).

The analysis that looked at all members of all qualifying workplace pension schemes, occupational pension schemes, group personal pensions (GPPs), and group stakeholder pensions (GSHPs), published 18 June 2020, revealed that 70% of eligible employees saving into a workplace pension in 2016 were saving consistently over the following three years.

The annual amount saved in 2019 by eligible savers was £98.4 billion, an increase of £5.3 billion compared to 2018.

The vast majority, (91%) of employees in the very large employer band (5,000+ employees) and the large employer band (250 to 4,999 employees) were those who participated most in the private sector.

Employees across the board, earning between £50,000 and £60,000 displayed the highest participation levels, with 93% of employees within this band participating in a workplace pension.

In the public sector, employees in the £50,000 to £60,000 band saw the largest decrease of 3% over the period of 2012 to 2019, while employees in the salary band of £10,000 to £20,000  increasing by 11% in pension participation.

In the private sector, the gap between the highest and lowest earners has narrowed since the introduction of automatic enrolment. The difference in participation rates between the highest and lowest earning band was 58% in 2012, now falling by 13% in 2019.

Across the whole economy, 88% of full-time male employees participate in pensions compared to 89% of full-time female employees, while 85% of female part-time employees participate in pensions compared to 74% of male employees.

In the public sector, 92% of both male and female employee participate in pensions in 2019. Both standing at 93% participation levels for full-time employees, 91% for female part-time employees and 84% for male part-time employees in the public sector.

In the private sector, overall participation rates for both male and female eligible employees were both 86% in 2019. While 88% of full-time female employees in the private sector participated in pensions, compared to 87% of male counterparts, (82% for part-time female employees and 72% for part-time female employees in 2019).

Those in the energy and water industry had the highest participation percentage at 94%, while the lowest was the agriculture and fishing industry at 78%, however, since 2020, this industry has seen a 59% growth in pension participation.

Overall, 91% of those associate professional and technical occupations roles participated the most in pensions, compared to those in elementary roles, where 82% participated.

Personal service roles such as carers, travel agents and nurses saw the largest increase since 2012, rising from 78% to 92% in 2019. In the private sector, the largest increase was in personal service occupations where the participation rate increased from 19% in 2012 to 84% in 2019.

Wales had the largest participating levels with 96%, while employees in the East had the lowest at 85%. In the private sector, those in Scotland had the highest participation levels at 88%, with the lowest being in Yorkshire and The Humber, the East Midlands and West Midlands at 85%.

The white ethnic group has had the highest participation rate of 81%, compared to the Pakistani and Bangladeshi group at 61%. However, the Pakistani and Bangladeshi ethnic group saw the largest increase from 36%  to 61%. Additionally, the Indian ethnic group saw an increase from 49% to 70% from 2012-2019.

Across the whole UK economy, a total of £98.4 billion was saved in 2019, an increase of £5.3 billion from 2018. The amounts saved in the public sector decreased by £0.8 billion, while in the private sector, this increased by £6.2 billion.

In 2019 alone, contributions accounted for 27% of savings, with the employer contributing 64%, while the remaining 10% being accounted for by income tax relief.

Within the public sector, the average annual amount saved per person decreased by £101 in 2019. In the private sector, savings increased by £291 in 2019.

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Darren Laverty, partner at Secondsight said: “It is great to see that workplace pension saving is on the up and that the auto-enrolment reforms have worked brilliantly for full-time employees. Businesses have played a major role in this, and it’s encouraging to see that so many employees now have some form of retirement savings. However, we shouldn’t be complacent and I would encourage businesses to continue to build on this good work and continue to promote and offer financial guidance around the workplace pension.

“In contrast, the numbers for self-employed are worrying. The government needs to step up and make a plan to help the self-employed save for their long-term future. Coronavirus crisis schemes such as the furlough and grants for self-employed have showed that the government is capable of bold action. It is time for it to step up to the plate on a long-term crisis too.”