Record numbers join workplace pensions
A RECORD number of employees were members of a workplace pension scheme last year, official figures show.
However, while the number of those saving in pensions has grown, millions of workers are still saving at inadequate levels, experts have warned.
Figures from the Office for National Statistics (ONS) show that 77 per cent of employees are now enrolled in a workplace pension scheme.
This compares with 47 per cent in 2012, the year that automatic enrolment into workplace pensions started.
For the first time since records began in 1997, there are now more members of defined contribution (DC) schemes than defined benefit (DB) schemes such as final salary pensions.
Some 26.8 per cent of employees were members of occupational DB schemes in 2019, while for occupational DC schemes the percentage was 27.7 per cent.
DC schemes are the type of pension that employers will often enrol workers into under automatic enrolment. Rather than promising workers a certain level of income in retirement, the people saving into them bear the risk of how much they will receive.
The ONS report also highlighted a pension membership gender gap within the private sector with more men (77 per cent) having a workplace pension than women (69 per cent).
Workplace pension membership for full-time employees was higher in the public sector than the private sector.
Tom Selby, a senior analyst at AJ Bell, said: “Automatic enrolment has succeeded in dramatically boosting the number of people saving into a workplace pension.
“The fact there are now more defined contribution scheme members than defined benefit is testimony both to the success of auto-enrolment and the continuing demise of guaranteed pensions in the private sector.”
Alistair McQueen, head of savings and retirement at Aviva, warned: “While a record number are saving in pensions, millions are still saving at inadequate levels, and many are missing out – either because they are too young, low-earners or self-employed.
“Recent Aviva research amongst UK workers aged 45-plus suggests 45 per cent are worried they will not have an adequate retirement income.”
MILLIONS of people can look forward to a brighter future now that a record-breaking 77 per cent of employees had a workplace pension scheme last year. Membership has soared 30 per cent since 2012 and demonstrates the success of automatic enrolment.
A remarkable eight out of 10 people aged 22 to 29 have a workplace pension.
However, more men (77 per cent) have such a pension than women (69 per cent). There is still much work to be done to combat pensioner poverty, and many of the younger generation will envy the more generous schemes enjoyed by their parents.
Nearly half (45 per cent) of workers fear they will not have an adequate retirement income. Hard-working people who do not want to be dependent on the state must have a safe and effective way to invest for their future.