Number of employees contributing to workplace pensions sees significant growth
New research has revealed that just under three-quarters of employees now contribute to a workplace pension.
According to figures from the Office for National Statistics, data which shows the proportion of employees who put money into a workplace pension scheme has grown to around 73%. This is up from 2012’s proportion, where less than 47% of workers contributed.
Commenting on the findings was Nigel Peaple. The Deputy Director DC of Lifetime Savings and Research, PLSA, highlighted the role that auto-enrolment had played in boosting the contributions, as well as suggesting that planned increase for the minimum contribution level should be higher.
He said: “Today’s ONS data clearly shows the success of automatic enrolment with a large increase in the number of employees paying into a pension compared to 2012, particularly among younger age groups. This is extremely positive and will mean millions of people in the UK will be better off in retirement as a result, however, the data also highlights that many of those saving are doing so at the minimum level.
“While the Government’s phased increases will see minimum contributions rise to 8% by 2019, there is a still a risk that this will not be enough to allow savers to live comfortably in retirement. We believe the minimum level needs to increase to 12% of salary over the course of the 2020s if retirees are to be financially secure. In our Hitting the Target report, we also argue that a simple and widely promoted system of retirement income targets would make it much easier for people to know whether they are on track to live the lifestyle they want in retirement.”