Defined Contribution  

Contribution to DC pensions up 21%

Single member schemes are not required to complete a return.

The figures may therefore not yet reflect all changes in DC memberships from October 2012 through to December 2017.

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Nathan Long, senior pensions analyst at Hargreaves Lansdown, said: "Whilst only representing a portion of the nation’s retirement savings, the fact more people are paying into pensions is to be cheered.

"This jump in numbers is down to the continued roll out and success to date of auto-enrolment, but average savings levels are down because the current level of contributions simply is not enough."

He said the number one challenge this year for pensions was ensuring opt-out rates remained low when the minimum people have to put in steps up.

Contribution rates are scheduled to increase from the current 2 per cent (1 per cent staff) to 5 per cent (3 per cent staff) in April and to 8 per cent (5 per cent staff) the following April. 

"By summertime we will have a much stronger indication of whether auto-enrolment will be successful," Mr Long said.

Paul Stocks, financial services director at Dobson and Hodge, agreed the upcoming changes to auto-enrolment would be the real marker.

He said: "Whilst those nearing retirement won't see a great deal of impact, for those who are entering employment, who will see 8 per cent contributions, the benefit will be tangible.

"However the proviso is that the state pension retains its value in real terms for those individuals.

"Ultimately, an increase is good for long term retirement planning as it encourages to spend less now and more later but if the pressure becomes too great right now, there will be those who opt out to meet their immediate needs."