Workplace pension participation has hit its highest level in a decade with young people among the biggest winners, new research has found.
Office for National Statistics figures published on 16 July revealed that overall, 70 per cent of eligible employees –13.9 million people – paid into a workplace pension in 2014, a 15 per cent increase in two years.
More than half (54 per cent) of 22 to 29-year-olds in the private sector are now in pension schemes, compared with only 24 per cent in 2012.
Pensions Minister Baroness Ros Altmann said: “There has been a dramatic increase in pension saving across the board, which is great news.”
Under the automatic enrolment initiative that began in 2012, all eligible workers will eventually be enrolled automatically into a qualifying workplace pension scheme by their employer, provided they are at least 22 years old and under state pension age and earn more than £10,000 a year. If they do not wish to belong, they must actively opt out.
All employers will be brought on board by 2018 and must offer eligible staff access to a pension scheme, regardless of how many people they employ.
Baroness Altman added: “Automatic enrolment is key to a pensions revolution, which is breathing new life into workplace pension saving, to help give people the security and independence to start planning for their future.
“The numbers of people participating are set to continue rising as automatic enrolment extends its reach to small and micro firms between now and 2018, by which time about nine million workers will have been enrolled.”
At Milsted Langdon Financial Services, we can advise on your options for maximising the tax efficiency of your pension savings and provide expert advice on all aspects of retirement planning, to help you clarify your options and make informed decisions to increase your retirement income. For more information, please contact us.