Auto-enrol will double pension income: DWP
Auto-enrolment could almost double private pension income by the time people now starting work reach their retirement, the department for work and pensions has revealed.
According to research from the DWP, its modelling systems have shown that, with auto-enrolment, the median private pension income could rise to between £153 and £195 a week by 2070.
Without these reforms, median weekly private pension income would only reach between £86 and £106.
The figures are from the DWP’s research, ‘Workplace Pension Reforms: Baseline Evaluation Report’, which describes the pensions landscape before automatic enrolment is introduced this year and employers’ preparation for the reforms.
It also found that private sector pension participation has fallen from 7.9m in 2003 to 5.8m in 2011, while private sector workplace pension saving has fallen from £39.3bn £35bn over the same period.
Steve Webb, pensions minister, said: “This October we will introduce the most important changes in pensions for a century to help people save and avert a pensions crisis in the future.
“We are living longer yet 11m of us are not saving enough for retirement.
“Automatic enrolment will reverse this trend as millions will have a workplace pension and could double their private pension income, on top of a reformed state pension.”
The research will be updated every year to track the effect of automatic enrolment.