Active occupational pension savers are at their highest levels for over 30 years, according to research from Aviva.
Figures suggest it is now normal for a full-time employee to be a saver in an occupational pension scheme.
In total, there are 19.8m full-time employees in the UK, with the report published today (23 September) showing that there are 11.1m active members of occupational member schemes, representing the highest figure since 1983.
In the private sector, participation has seen a reversal of fortunes.
The latest figures report private sector active membership now sits at 5.5m after over 20 years of continual decline from 6.5m in 1991 to 2.7m in 2012.
Additionally, private sector active membership is now on a virtual par with public sector active membership, at 5.6 million. Auto-enrolment has been the major driver behind this success.
Auto-enrolment requires a minimum contribution of 1 per cent of salary from the employee and one per cent from the employer at present.
Figures published by the Office for National Statistics today (23 September) report 1.5 per cent and 2.5 per cent contributions in defined contribution occupational pensions, respectively. This is 4 per cent in total.
The average contribution in a defined benefit occupational pension scheme currently sits at 21.2 per cent.
Steve Webb, director of policy at Royal London, said: “The Office of National Statistics finding that the average contribution into a private sector occupational defined contribution pension scheme is just 4 per cent is a shocking figure.”
The legal minimum rises to a total of 5 per cent in 2018 and then 8 per cent in 2019. The ability for individuals and employers to rise to these higher figures remains untested.
There has been a continual decline in the active membership of defined benefit pensions in the private sector.
At present there are 1.6m active members of private sector defined benefit occupational pensions, down from 3m in 2006.
Aviva estimates that if this rate of decline was to continue in the years to come, active membership of defined benefit occupational pensions in the private sector will reach zero by 2024.
Alistair McQueen, saving and retirement manager said: “Saving in a workplace pension is now typical behaviour in the UK. If a full-time employee is not active in a workplace pension they are in the minority.
“There is however no room for complacency. While higher levels of participation represent a big step in the right direction, attention must also focus on the adequacy of savings amongst the millions who are now contributing.
Mr Webb added: “The record levels of workplace pension membership in 2015 are hugely encouraging, and the continuation of automatic enrolment since then means that the numbers will continue to surge. But the sting in the tail is the very low rates of contribution into many of these pension plans.
