The latest figures from the Department for Work and Pensions (DWP) show that since 2012, the number of people saving into a workplace pension has increased by 4.4 million.
This means that by 2015 – the latest date for which data is available – nearly seven million people saved more than £82 billion in to workplace pension schemes since the scheme was launched in 2012, with even more expected to have been saved in 2016.
Of those eligible employees, 79 per cent have saved into a workplace pension in at least three of the last four years, which shows that take up has been fairly well maintained as well.
By 2018 more than 10 million people are expected to be paying into a workplace pension, generating around £17 billion a year more in workplace pension saving by 2019/20.
This new data comes as the government announces its review into the automatic-enrolment regime in 2017, which will explore the ways in which the policy can be further developed to encourage more people to save.
The review will assess the existing coverage offered to employees and consider the needs of those not currently benefiting from automatic-enrolment so that more people can access workplace pensions.
This will include a review of the current automatic-enrolment thresholds, in particular the earnings trigger, qualifying earning bands and the age criteria.
It will also include further exploration into how the growing number of self-employed workers can be helped to save for their retirement.
Damian Green, Secretary of State for Work and Pensions, said: “Saving into a workplace pension allows workers to benefit from both contributions from the government and their employer. New research highlights that nearly £82 billion was saved into pensions in 2015, of which almost 60 per cent was contributed by employers.
“This level of saving has been bolstered by the contributions from employers who have already enrolled their staff. The estimated average amount of contributions for workers of medium or large firms has increased to eight per cent of employee earnings, four times higher than the current minimum contribution rate.”
DWP aims to publish a report with its new policy recommendations towards the end of 2017. We will keep you up to date with these changes as and when they are introduced so that you remain compliant.
At Milsted Langdon we know that the auto-enrolment process can seem bewildering, which is why we can provide a range of services to help you cope, from ensuring full compliance with your obligations to managing your business’s payroll.
We have also prepared a useful guide to help you understand your requirement as an employer, which can be found by clicking here.
For more information about how we can help you with auto-enrolment, please contact us.