Personal Pension  

Reforms lead to first rise in pension saving in seven years

Official statistics have recorded a rise in people saving for a pension for the first time in seven years, as the first wave of workers that have been auto-enrolled into a workplace scheme under auto-enrolment reforms make their way into the dataset.

According to a figures published by the Office for National Statistics on Friday (14 March), the proportion of employees who belong to a workplace pension increased to 50 per cent in 2013, the first increase since 2006.

Last year the figure dropped below 50 per cent for the first time since the figures were first collated in 1997, to 46.5 per cent.

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The figures were taken in April 2013, approximately six months after the first of the largest employers were staged into the reforms. As a result membership among large employers saw the most substantial rise, from 36 per cent in 2012 to 51 per cent.

In a statement the Treasury said membership was likely to have risen significantly since the data was compiled, as latest figures from The Pensions Regulator show 3m have now been enrolled compared to the 500,000 enrolled as at April 2013.

There is still a marked disparity in savings rates of public and private sector employees, with 85 per cent of the former group now saving for a pension compared to only 36 per cent of the latter.

Steve Webb, pensions minister, said: “Our reforms to pensions are working. More people are saving and this shows that even at an early stage automatic enrolment is having an extraordinary impact.

“The scheme has gone from strength to strength and now over 3m people have been automatically enrolled. Ensuring people can plan for their retirement is paramount to a strong economy.”