Workplace Pension Saving Nears £100bn

Latest figures from the Department for Work and Pensions show more than 19 million UK employees are saving into a pension - but age, earnings and region all affect take-up rate

Annalisa Esposito 22 June, 2020 | 9:39AM
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Some 19.2 million workers are saving into a workplace pension, latest figures from the Department for Work & Pensions reveals. It estimates that since auto-enrolment came in force in 2012, the proportion of eligible employees participating in a workplace pension has increased by a third. 

It means that by the end of 2019, UK employees had saved a staggering £98.4 billion into their pension plans since auto-enrolment began, up £5.3 billion from the previous year alone. The upward trajectory is expected to continue even while the minimum contribution level under auto-enrolment has increased. Workers now save 8% of their salary into their pension under auto-enrolment (including at least 3% from their employer) - up from just 3% when the scheme was first introduced. Despite this, drop-out rates has remained low at around 10%.

Helen Morrissey, pension specialist at Royal London, says: “These figures show the enormous impact that auto-enrolment has had on pension saving." The impact is particularly clear in the private sector, where the proportion of eligible employees participating in a workplace pension has rocketed by 44 percentage points to 86% over eight years. In the public sector, 92% of employees are now saving into their workplace scheme.

However, while nearly three out of four eligible workers are saving persistently, the persistency rate has declined dropped from 79% to 70% in 2012. "Persistent savers" are those who save for at least two years once they have been enrolled into a workplace scheme; there are various reasons individuals may not achieve for this such as moving to a new workplace, bevoming unemployed or self-employed, or opting out of the scheme. 

Age, Earnings and Gender

Small employers with 50 or fewer employees were the last to have to introduce auto-enrolment, and the participation among their workers continues to lag larger firms. At "very large" businesses (those with more than 5,000 employees) or "large" (between 250 and 4,999 employees), typically 91% of eligible employees are saving into their workplace pensions. Yet the take-up rate falls below 80% at "small" companies (5 to 49 employees) and below 60% for "micro" businesses (with fewer than 4 employees).

There is also a measurable gap between higher and lower earners, the DWP report shows, though this is closing. Those earning between £50,000 and £60,00 have the highest participation levels, at around 93%. This compares to around 80% among those earning between £10,000 and £20,000. 

Interestingly, it is the youngest cohort of workers where the biggest transformation can be seen. Morningstar's own research into Generation Z's attitudes to finances showed investing is high on the minds of younger workers and this is confirmed by the DWP's findings. It says workplace pension participation among those aged 22 to 29 has rocketed from 24% to 85% since the advent of auto-enrolment in 2012. 

Meanwhile, it's encouraging to see there is little in the way of gender split among those saving for retirement. Among full-time employees in 2019, some 88% of men and 89% of women were participating in their workplace scheme. There are, however, persistent concerns that as more women work part time they are more likely to be ineligible to join their auto-enrolment scheme (which requires minimum earnings of £6,240) and so may still be more likely to undersave for retirement. 

Regional Differences in Pension Saving

The rate of participation also varies by industry and by region and, while that gap has narrowed, it is still real. Energy and water, for example, have the highest take-up rate at at 94%. That is some 16 percentage points ahead of the Agriculture and Fishing industries, where just 78% of eligible workers are saving. 

There are also significant regional differences, the data shows. In the public sector, take-up in Wales the highest at 96% of eligible employees, and lowest in the East of England, at 85%. In the private sector, Scotland has the highest participation level at 88% compared with 85% in Yorkshire and the Humber, and the East and West Midlands. 

While the results are encouraging, Morrissey points out that the impact of the Covid-19 pandemic, which has seen many people furloughed or out of work could have a negative effect in the next batch of results. “In the coming months we are likely to see huge job losses, while those who remain in work may feel the need to reduce or even stop contributing to a pension," she says. "While this is understandable during such uncertain times, hopefully it will be relatively short-term. People must ensure they resume their pension saving so they don’t risk long-term damage to their financial security in retirement.”


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Annalisa Esposito  is a data journalist for

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