The number of eligible employees participating in a workplace pension declined to 11.7m (58 per cent) in 2013 from 12.3m (65 per cent) in 2003, department for work and pensions statistics have revealed.
However the statistics also showed between 2012 and 2013 there was a “significant” increase in participation in workplace pension schemes of 900,000, which the DWP suggested shows the positive impact of the introduction of automatic enrolment.
The occupational pension scheme’s survey for 2013 revealed that total average contributions was now 9.1 per cent, compared with 9.7 per cent the previous year.
Contribution rates to defined benefit schemes, excluding deficit reduction payments, remained higher than for defined contribution schemes.
The advent of auto-enrolment did mean that the numbers contributing, or having contributions paid into a scheme, rose slightly from 7.8m in 2012 to 8.1m in 2013, for both the private and public sector.
Adviser view
Geoff Charles, chief executive of national equity release advising firm Bower Retirement Services, said: “After a worrying decline in the number of eligible employees participating in a workplace pension between 2003 and 2013, it is encouraging to see that the trend is being reversed.
“In an austere economic climate or in times of financial hardship it can be tempting to think that doing away with one’s pension saving can free up some cash, but this is a false economy that will hit pockets hard once full-time employment ceases. It can be tempting to live in the moment, but people really need to think about how they will fund their retirement.”