From the beginning of automatic enrolment in late 2012 to 2015, the percentage of people saving adequately for retirement in to a defined contribution scheme rose from 45 per cent to 56 per cent.
However, in 2016 it remained at 56 per cent.
Scottish Widows predicted this flat trend would continue, citing research that found 58 per cent of people believed they wouldn’t be able to save any more in the next 12 months than they do now.
The percentage of people relying on defined benefit savings, meanwhile, continued to fall, hitting just 24 per cent.
That was down from 28 per cent last year.
The research also revealed that people in their 40s were actually in a worse position in 2016 than they were in 2015, with just 53 per cent saving adequately for retirement. That was down from 57 per cent last year.
The number of non-savers in their 40s also increased to 19 per cent, up from 16 per cent in 2015.
The percentage of people in their 30s saving adequately, on the other hand, increased from 52 per cent to 53 per cent.
Particularly worrying is the fact that savings levels among those in their 40s drop off at a time in life when retirement may be within 20 years. Robert CochranOverall, the percentage of people not saving at all for retirement fell slightly, from 19 per cent to 18 per cent.
The age at which people on average said they were able to afford to start saving for a pension rose from 28.9 years to 29.3 years.
Nevertheless, the age at which people expected to retire fell slightly, from 62.7 years to 62.5 years.
On the upside, Scottish Widow stated auto-enrolment was continuing to have a positive effect. Looking only at those covered by auto-enrolment, the proportion of people saving adequately increased to 43 per cent, up from 39 per cent.
Groups found not to be served well by auto-enrolment were women (just 24 per cent were saving adequately), the self-employed (24 per cent), and those working for small businesses (25 per cent).
Robert Cochran, retirement expert at Scottish Widows, said it was “disappointing” to see savings levels are “starting to plateau”.
“Particularly worrying is the fact that savings levels among those in their 40s drop off at a time in life when retirement may be within 20 years,” he said.
But he said automatic enrolment was the “light at the end of the tunnel”.
“Auto-enrolment has already brought six million new workplace savers into pensions and with the minimum contributions for employers and employees set to rise in coming years, we expect average levels of savings continue will rise.”
Marlene Outrim, managing director of UNIQ Family Wealth, said people needed to be realistic about their retirement expectations.
“If you want to retire on a reasonable income at 60 or 65, then you have to save. There is no other way around it,” she said.
She said she was not hopeful that auto-enrolment would solve the retirement adequacy problem, particularly given minimum contribution rates were so low, and members could opt-out.
However, she was not comfortable with the idea of compulsion either, saying: “I don’t believe you should tell people what to do with their money.”
Her primary solution to increase saving rates was to cultivate a change in mindset. “You’ve got to start educating people early on,” she said.
Richard Harrington, the recently-appointed minister for pensions, said: “We want everyone to set themselves up for a decent retirement by planning earlier and saving more. This is why we are helping millions of people of all ages save into a workplace pension through automatic enrolment, which has reversed a decade-long decline in pension saving.”
james.fernyhough@ft.com
