The number of UK employees saving for retirement through a workplace pension has skyrocketed since automatic enrolment came into effect eight years ago.
That is according to recent government data, which shows that 88% of eligible employees – 19.2 million people – are now saving through a workplace pension, up from 55% in 2012.
The total annual amount saved stood at £98.4bn in 2019, which is an increase of £5.3bn from the previous year, with all age groups now equally likely to be saving for the future.
Moreover, the data shows that participation among non-eligible employees – those under 22, over the state pension age, or earning below £10,000 a year – increased from 16% in 2012/13 to 32% in 2018/19.
“The fact a third of people who are not eligible to be auto-joined are still saving shows that pensions are becoming a social norm within society,” said Nathan Long, interim head of policy at Hargreaves Lansdown.
“Age now plays almost no part in your likelihood to be putting money aside for your future, which is a huge leap forward.”
The government data also reveals that 41% of the total amount saved each year through workplace pensions goes into public sector schemes, with 59% going to private sector schemes.
However, the figures show that those earning £10k to £20k have the lowest participation, with only 79% of eligible workers saving at this level, suggesting that the cost of saving plays a big part of non-participation.
In addition, pension participation among the self-employed continues to fall, declining from 21% in 2009/10 to 14% in 2018/19.
Long said that the impact of COVID-19 is also a potential cause for concern. “Quite how many of us will stick with our pension savings if friends and colleagues are losing their jobs is uncertain,” he continued.
“The self-employed continue to be precariously placed with just a handful choosing to save into a pension, showing the existing incentives just don’t resonate.
“The government will also be acutely aware that 41% of all pension contributions go to public sector employees that represent less than a fifth of all workers.”