Auto-enrolment has seen the number of people enrolled in a workplace pension jump by almost 50 per cent, hitting just over 15 million by the end of 2015, figures from the Department for Work and Pensions have revealed.
The figure is up from 10.7 million in 2012, before the auto-enrolment regime was introduced. Since that date the number has steadily increased.
Men benefitted more than women from the introduction of the new workplace savings regime, with the number of men in a employee pension jumping by 2.5 million, compared to 1.9 million women.
In total, 8.1 million men were members of workplace pension schemes at the end of 2015, compared to 7 million women.
The most likely age group to be enrolled in a scheme were 45-49 year olds, followed by 50-54 year olds and 40-44 year olds.
The least likely to be enrolled were 22-24 year olds and the over 60s, while 25-34 year olds saw the biggest rise in pension scheme membership.
The report also looked at the percentage of pensioners on a low income. While the overall trend saw pensioner poverty rates decrease - in keeping with a recent report by the Institute of Fiscal Studies - those over 85 were actually marginally worse off than they were five years ago.
The report also found an ethnic divide, with a huge spike in the number of black British pensioners and pensioners of African and Caribbean origin living on a low income - up from 19 per cent in 2010 to 30 per cent in 2015.
The percentage of Asian or Asian British retirees living on low incomes dropped from 31 per cent to 27 per cent, while the percentage of white retirees was steady at about 13 per cent.
Claire Walsh, a chartered financial planner at Aspect8, said the low opt-out rate - currently around 9 per cent - was “great news”.
However, she said in her experience, small employers were less interested in auto-enrolment. She predicted that as smaller businesses reached their staging dates over the next two years, the opt-out rate would increase.
However, she did not think a higher contribution rate would lead to an increase in opt-outs. “People just don’t engage with their finances. They’re inert, which, for auto-enrolment is a good thing.”
Earlier this week, former pensions minister Steve Webb urged the government to make increasing the AE contribution rate beyond the planned 8 per cent its priority.
james.fernyhough@ft.com
