Pension membership rises for the first time in EIGHT years

By

Adam Uren

|

The introduction of automatic pension saving has seen the number of UK workers saving into a retirement pot rise for the first time in eight years, official figures show.

Half of workers were members of a workplace pension scheme as of April 2013, with the rise from 47 per cent a year earlier the biggest seen since Office of National Statistics (ONS) records began in 1997.

The rise has followed the introduction of automatic enrolment, which has seen every pension-less worker that qualifies placed onto a savings scheme, and given just 30 days to ‘opt out’ if they don’t want to be a part of it.

Rise: Pension saving has risen for the first time since 2006.

The first 18 months of auto-enrolment saw the nation’s biggest employers enrol their staff, and this shows in the ONS figures with pension membership at companies with more than 5,000 employees rising from 36 per cent in 2012 to 51 per cent last year.

Responding to the figures, pensions minister Steve Webb said: ‘More people are saving and this shows that even at an early stage automatic enrolment is having an extraordinary impact

‘The scheme has gone from strength to strength and now over three million people have been automatically enrolled. Ensuring people can plan for their retirement is paramount to a strong economy.’

The next four years will see the nation’s medium and small employers reach their automatic enrolment staging dates, with an estimated seven million people due to be enrolled by 2018.

The ONS figures only cover up to last April so only takes into account the first six months of auto-enrolment. Pension membership now will be much higher, given that more than two million people have been enrolled since then.

There is still a huge gap between pension membership in the public and private sectors, with 85 per cent of public sector employees saving in retirement plans, compared to just 36 per cent private sector.

Popular: Final salary pensions still make up the bulk of pension schemes, given they are still widely used in the public, if not the private, sector.

And those in the public sector are on historically better pensions too, with more than 90 per cent on the gold-plated defined benefit pensions, like final salary schemes.

Just under a quarter of private sector workers are in defined benefit pensions, which follows a decade of schemes closing at a record rate.

The figures also show how people working in sectors where pension membership was previously low has increased since auto-enrolment began.

Those working in sales and customer service jobs were least likely to have a pension in 2012, but since then the proportion of such workers with pensions has risen from 19 per cent to 28 per cent.

Lower paid workers are also benefiting from the enrolment, with 75 per cent of public sector workers earning between £100 and £200 a pension member in 2013, compared to 59 per cent in 2012.

And younger people who were less likely to voluntarily save into a pension scheme are now members, with 37 per cent of 22 to 29-year-olds members in April 2013, up from 31 per cent a year before.

Comments (15)

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clubcat136,

halifax,

1 hour ago

raising the state pension age!!

have you ever seen a 69 year old builder? or steel worker.

people may be alive at 69 but most in manual work will not be capable of sustaining a job, so we will have for many people struggling on ,not capable of doing a job properly but yet not qualifing for a state pension.

has this been ever mentioned by politicians? in a word NO they prefer not to want to think of it like that .

but its a stark fact. the harsh reality is uk governments have become increasingly callous to there own people ,in years to come this is going to become a major problem of the gov own makeing as always.

Paul,

London, United Kingdom,

6 hours ago

Osborn is taking away the S2P which in some cases doubles the basic state pension. Moving the state pension age, the RPI to CPI move and in the 80s taking away the link to wages growth thanks to Mrs T

m22,

Suffolk by the sea, United Kingdom,

6 hours ago

Again gormless Brown thought it was OK to switch inflation target to cpi and ruin private sector pensions. Maybe if he had left some money for a rainy day this wouldn’t need to have happen.

AP,

STAFFORDSHIRE,

6 hours ago

In twenty years time the government will raise the pension retirement up 10% as they did with the private pensions 50 to 55, so state retirement is now 69 add another 6.9 years on and they will be paying you nothing, as you will probably be dead long before you reach retirement age what a great way of taxing the population again pay into a Isa maybe not great returns but at least you have access when YOU decide to

Phil Salisbury,

SALISBURY, United Kingdom,

7 hours ago

This is great news for the UK! How could any sane person think that BTL and speculation could look after a nation in retirement! Selfish one up-manship and taking advantage of an inept governments policy that favours the rich has no longevity in a civilised society. Thank goodness the mindset of decent Britons is changing for the good at last. Hopefully IRs will rise in line with this news and we can return to a retirement plan that includes the majority of hardworking Britons.

Robert,

Bury, United Kingdom,

3 hours ago

Phil, I,m not sure that the mindset of Britons is changing but at least it’s a step in the right direction. The view that “property is my pension” either residential or BTL is seems to be entrenched within the British psyche, and that’s not how it should be…. not everyone can be a landlord, but at least pension provision is available to everyone, either privately or through their workplace. Those who advocate downsizing as a means of providing an income in retirement are not forthcoming on how they are able to preserve their capital and also maintain an income that keeps up with inflation, a strategy that would have been sorely tested within the last five years with interest rates at rock bottom. At least with pension provision you can keep your home and still have an income.

mikejt,

No,

7 hours ago

my firm puts a whole 11 quid a month In for me. I’ve not had a pay rise in 2 years and I suppose I won’t get one now because they’ll say they’ve had to fund this

Angie,

Hampshire,

5 hours ago

That will be down to your level of income as currently employers only need to pay in a minimum of 1% of salary. £11x12months=£132 times that by 100 it makes your salary £13200. That’s not much higher than minimum wage (currently £6.31) if your working full time.

The amount employers contribute will be rising in stages. You should also be contributing a minimum of 2% of salary as well. Look at the bright side, pension payments are taken out before tax so your tax payment will be lower and if with minimum wage rising every year you’ll soon get a pay rise.

Aggrieved pensioner,

Manchester,

8 hours ago

….. and when you retire the politicians will means test you for your own money and decide it would be better to direct free money to the poorer less fortunate among you i.e.; those who haven’t paid a penny in. Politicians eh, what would you do with them.

Paul,

London, United Kingdom,

10 hours ago

There was a great scheme in the 80s until Mrs T stopped companies adding to them at 15% plus PA.

m22,

Suffolk by the sea, United Kingdom,

9 hours ago

There was a great scheme in the 90s until Gormless Brown ruined it completely and a LOT of people will never ever forget that.

Paul,

London, United Kingdom,

6 hours ago

m22 Brown changes the way tax on dividends was taxed, less than 1%. So in 13 years it works out at less than 1 year of the Torys holiday years. The Tory damage would have left less growth and smaller dividend income worth more than Brown changes. Also lets not forget the Torys were the first to try the dividend change.

russki,

teesside,

10 hours ago

It would become even more popular if pension savers got to keep the full benefit of their efforts. But no, if you look after your own future then a whole raft of support that is routinely handed out to the feckless is withdrawn from those who made an effort to support themselves in old age. No wonder millions choose to rely on the state then.

John Smith,

West Midlands,

10 hours ago

A rise ~ well automatic enrollment will be the reason then, won’t it ?

Thomas Catte,

Purfleet, United Kingdom,

11 hours ago

You save it, and Labour are getting ready to steal it. Situation normal!

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Pension membership rises for the first time in EIGHT years