One million employers have now enrolled their staff into a workplace pension through auto-enrolment, according to figures released today (13 February) by The Pensions Regulator.
The milestone, which was expected to be reached this month, was achieved as the deadline for the last companies to join auto-enrolment approaches.
The regulator’s data showed more than 600,000 employers have complied with their duties in the past year alone.
Government-backed workplace pension scheme National Employment Savings Trust (Nest), for example, was processing up to 1,500 new employers a day in December, as the staging process ended on 1 February.
In the beginning of 2017, Nest estimated that around 700,000 small and micro-businesses would stage during the year.
There are now more than nine million people auto-enrolled in a workplace pension scheme.
Guy Opperman, the minister for pensions and financial inclusion, said: "With one million employers – from the small sandwich shop owner to the large supermarket chain – now enrolling their staff into a workplace pension, we are creating a nation of responsible employers who are reassuring their workforce that with their support, they will have a secure retirement.
"Clearly this would not have been possible without the hard work and continued support of employers across the UK.
"That is why we are committed to working closely with them to prepare for our recently announced proposals which will ensure even more people, including 18-21 year olds, lower earners and multiple job holders, can benefit from a workplace pension in the future."
These proposals, published in December by the Department for Work and Pensions, include lowering the age for auto-enrolment of workers into workplace pension schemes from 22 to 18-years-old, and changing the way pension contributions are calculated.
The DWP said recent research showed workplace pensions have become ‘the new normal’, since small and micro employers find auto-enrolment necessary, sensible and easier to implement than first expected.
In addition, four in five of today’s eligible workers (83 per cent) now see saving through a workplace pension as the normal thing to do if they are in paid employment, it said.
Tom McPhail, head of policy at Hargreaves Lansdown, said auto-enrolment had been a "remarkable success".
He said: "But there is still time for defeat to be snatched from the jaws of victory if we don’t remain vigilant.
"As the contribution rates rise it is essential to engage members and to promote to them the value and necessity of saving for retirement through a workplace pension.
"This engagement will lead them towards making active decisions around how they manage their retirement savings, and how and when they draw on their pensions which will help them to get the best possible value out of the money they’ve invested."
From April, the auto-enrolment minimum total contribution – now at 2 per cent - 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.
maria.espadinha@ft.com
