There are now more than 9m people auto-enrolled in a defined contribution (DC) workplace pension scheme, according to figures from The Pensions Regulator.
This is one million more people than the figure released in June by the Department for Work and Pensions (DWP).
In a video on Twitter, Guy Opperman, minister for pensions and financial inclusion, classified the milestone as “a remarkable achievement”.
He said: “It means that 9m people have had their options for saving for retirement completely transformed.
“Automatic enrolment has changed the savings culture in this country forever and we are not done yet.”
Mr Opperman hinted that the auto-enrolment coverage could be soon increased.
He said: “We will soon publish our much-anticipated review of the auto-enrolment policy so more and more people can join a workplace pension.”
Launched last year by the DWP, this review is headed by Ruston Smith, trustee director at The People's Pension, Jamie Jenkins, head of pensions strategy at Standard Life, and Chris Curry, director of the Pensions Policy Institute.
Matthew Burrell, senior policy adviser for DC at the Pensions and Lifetime Savings Association (PLSA), said that auto-enrolment “has made pension saving part of everyday life”.
He said: “This milestone shows how close we are to the successful completion of staging: the process of making sure almost all UK businesses offer a workplace pension.
“Our focus now should be on raising contributions. People need clear communication from government that minimum contributions will rise in April next year and about the importance of staying in their pension scheme."
Currently the auto-enrolment minimum total contribution is 2 per cent - 1 per cent each from the employee and employer.
From April 2018, the minimum total contribution will increase to 5 per cent, with the employee paying 3 per cent.
One year later, it will increase again to 8 per cent, with the worker paying 5 per cent.
A total of £17bn a year will be going into workplace pensions by 2019 to 2020 because of auto-enrolment.
According to Nathan Long, senior pension analyst at Hargreaves Lansdown, this week’s milestone means that “the plaudits continue to roll in for the auto-enrolment program”.
He said: “The success of the legislation could mean the publication of the auto-enrolment review by the end of this year is a quiet affair, with those involved concluding it is working pretty well so why rock the boat.
“In time, we will need to see higher contributions, and the snowballing problem of the aversion of the self-employed to save for retirement will have to be addressed, but bedding in the contribution increase in April is surely the biggest headache for policy makers right now.”
maria.espadinha@ft.com
