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  • June 2019
06

Workplace pension scheme membership hits new heights

Open-access content Thursday 20th June 2019

Membership of occupational pension schemes in the UK has increased by almost five million in just one year, the Office for National Statistics (ONS) has revealed.

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The figures show that total workplace pension membership was an estimated 45.6 million in 2018, compared with 41.1 million the previous year.

This is the highest level ever recorded by the ONS' Occupational Pension Schemes Survey, with the increase thought to reflect the success of automatic enrolment.

The data also shows that the average total contribution rate was 5% for defined contribution (DC) pension schemes in the private sector last year, up from 3.4% in 2017.

"However, we shouldn't underestimate the scale of the challenges ahead," said Hargreaves Lansdown's head of policy, Tom McPhail.

"For millions of people, payments into DC pensions still need to be around double their current rates and there are nearly five million self-employed people outside the pension system."

The ONS data shows that there were 17.3 million active members of workplace pension schemes in 2018, with 11 million in the private sector and 6.3 million in the public sector.

It also reveals that active membership of private sector DC occupational schemes was 9.9 million last year, representing a 28.6% increase on the 7.7 million recorded in 2017.

This comes after separate research found that an additional 10 million employees have started saving into a workplace pension since auto-enrolment was introduced in 2012.

However, McPhail highlighted how there are still 10 million employed people in the UK that have been excluded from auto-enrolment because they are not eligible.

Moreover, today's figures show a rapid increase in 'deferred' pension pots as a result of job changes, with the number increasing by over two million in the last year.

"The government can fix this by giving people the right to take their existing pension on to their new job, rather than being forced to take on a new pension every time they move employment," McPhail added.


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This article appeared in our June 2019 issue of The Actuary.
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