Workplace pension saving at a 10 year high
20 July 2015
With the introduction of automatic enrolment workplace pension participation has rocketed to its highest level in a decade with young people and those in lower paid jobs among the biggest winners.
New figures from the Office for National Statistics (ONS) have revealed that overall, 70% of eligible employees –13.9 million people – paid into a workplace pension in 2014, a 15 percentage point increase in just 2 years.
Young people in the private sector in particular have enjoyed a remarkable boost to their future retirement prospects, with more than half now saving. The 54% of 22 to 29-year-olds who made regular contributions in 2014 is more than double the 2012 figure of 24%.
Bar staff, sales staff and workers in lower paid jobs are all benefiting too, with ever increasing numbers paying in. It is a further sign that the automatic enrolment pension reform is turning around the long-term decline in people who are saving for the future.
The workplace pension participation rates from the ONS also showed that:
- those earning between £10,000 and £20,000 saw the largest increase between 2012 and 2014, more than doubling from 21% to 50%
- the participation rate for staff in hotels, restaurants and bars is now running at 59% – up 31 percentage points in just 2 years
- the energy and water industry has the highest participation rate, with 83% of workers now paying into a workplace pension, an increase of 18 percentage points since 2012
- 73% of women and 68% of men are now paying into a workplace pension, up by 15 and 16 percentage points respectively since 2012.
The automatic enrolment process has been completed by large and medium-sized employers, and is now rolling out to small and micro firms the length and breadth of the UK. All employers have to offer their eligible staff access to a pension scheme, regardless of how many people they employ. So far nearly 5.3 million people have been enrolled by more than 50,000 employers.