Over 4 Million New Pension Savers

The number of UK workers saving money into a pension has risen by 4.4 million. The government’s introduction in 2012 of “auto-enrolment” meant that employers had to automatically enroll their eligible staff in a workplace pension scheme. With contributions made to the scheme by both the employee and employer, it is estimated that this has caused an extra £2.5 billion to be put away for retirement every year.

The Financial Times reports

“The duty has led to a “remarkable” rise in workplace pension membership, which had previously been in decline, according to research by the Institute for Fiscal Studies, a think-tank… In 2012 there were about 5.4m private sector employees who were members of a workplace pension. By 2015 this had increased to 10m: the IFS suggested 4.4m new workplace pension savers came as the result of automatic enrolment… But the measure was having its biggest impact among groups where workplace pension saving was previously low, according to the analysis… Currently, only those earning more than £10,000 a year and aged between 22 and state pension age will qualify. But the analysis suggested that since automatic enrolment, a further 600,000 workers who were not eligible had also joined a workplace pension, a rise of 18 percentage points, with the biggest increase among low earners.”