Personal Pension  

AE lifts pensions uptake among younger workers

Figures from the Office for National Statistics, part of its yearly survey of hours and earnings, found that since the workplace pension reforms, more people have started contributing to a workplace pension.

The ONS found that since the introduction of auto-enrolment in 2012, 37 per cent of 22 to 29-year-olds were members of workplace pensions in 2013. This was a six-percentage point increase on 2012, when 31 per cent had taken up a pension.

According to the 27-page study from the ONS, the general increase in membership of workplace pensions in 2013 was most evident among lower-paid employees.

Article continues after advert

The proportion of full-time employees in the private sector earning £100-200 a week and who were members of a workplace pension, has increased from 8 per cent in 2012 to 12 per cent in 2013.

John Ball, head of UK pensions at consultancy Towers Watson, said: “When this snapshot was taken, only the biggest employers in the country were legally required to automatically enrol people into pensions.

“Today, you would get a healthier picture. The size threshold for employers that must comply with the automatic enrolment rules has come down from 6000 workers then to 250 now.”

Adviser view

John Maynard, business development manager for Hertfordshire-based Richmond House Group, said: I’m finding that employees in this space are mainly reluctant participants, but likely not to opt out as they understand the long term benefits, and they have employers that are generally promoting it.

“It’ll be interesting to see how this develops as we work our way down the company size to less enthusiastic employers and those putting their plans in place without advisory assistance.”