Official figures reveal UK workers face retirement regrets due to low pension scheme contributions.
10 May 2018
According to official figures the number of UK employees participating in workplace pensions has reached a record high. The Independent has reported that experts are concerned that savers face a shock if their contributions do not increase but stay at minimum levels.
Official data from the Office for National Statistics (ONS) shows the proportion of employees who contribute to a workplace pension has increased by almost a quarter since the introduction of automatic enrolment in 2012. Five years ago, only 47% of employees were in a work place pension scheme, this has increased to around 73 per cent in 2017. Despite the increase in numbers contributions have stayed close to the minimum levels required.
In April, the minimum overall contribution rate to an automatically enrolled pension rose from 2 per cent to 5 per cent of an employee’s qualifying earnings. This will rise again in April 2019 to 8 per cent.
Information reported by ONS in 2017 found that employee contributions were contributing less than 1 per cent of pensionable earnings, and only around one in three employees were contributing 3 per cent or more. This is a reduction on average contribution rates since 2012.
This could leave savers facing a tougher retirement than they thought.
Read the full press release here