Workplace pension saving at a 10 year highAugust 11, 2015 // No Comments
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 which is 13.9 million people, paid into a workplace pension in 2014. This is 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 numbers of people participating are set to continue rising as automatic enrolment extends its reach to small and micro firms between now and 2018, by which time about 9 million workers will have been enrolled. Automatic enrolment has completely changed the face of pension saving. Instead of individuals having to fill out forms to join a pension scheme, they are now enrolled automatically by their employer provided they are at least 22 years old and under state pension age, and earn more than £10,000 a year. If they don’t want to belong they now have to actively opt out.
The full report may be read on the DWP’s website.