Record numbers enrolled in occupational pension schemes

A record number of people have enrolled into occupational pension schemes, according to new data from the Office of National Statistics (ONS). The ONS figures revealed that total membership of occupational pension schemes in the UK was an estimated 41.1 million in 2017, compared with 39.2 million in 2016 and is the highest level recorded by the survey. Total membership of public sector pension schemes increased from 14.8 million in 2016 to 15.5 million in 2017.The study also showed that active membership of occupational pension schemes was 15.1 million in 2017, split between the private sector (8.8 million) and the public sector (6.3 million). Active membership of private sector defined contribution schemes was 7.7 million in 2017, compared with 6.4 million in 2016. But contributions have fallen according to the statistics. In 2017, for private sector defined contribution schemes, the average total (member plus employer) contribution rate was 3.4%, falling from 4.2% in 2016. Experts welcomed the increase in occupational pension scheme membership. Royal London head of business development, Clare Moffat, said: “The good news from this survey is that total membership of occupational pension schemes has increased from 39.2 million in 2016 to 41.1 million in 2017. “This continues to show the impact of the workplace pension reforms which means many more employees will now have a pension in retirement. “The bad news is that the average contribution rate in private sector defined contribution schemes has reduced again from 4.2% to 3.4%. “The increase in the minimum contribution for auto enrolment will help but as it currently stands these increases will still not be enough to deliver a decent retirement income for the majority of people. “People need to start thinking about the type of retirement they want to have and how much they need to save to achieve it. “Small regular increases can have a large impact on the quality of life in retirement.”Nathan Long, senior analyst at Hargreaves Lansdown, said: “The growth in pension savers shows auto-enrolment has been spectacular at changing the financial future of the nation.“Attention should now shift to helping everyone gain the confidence to take control of their own retirement if they want to.”He added: “The amount people are paying in needs to rise but will automatically go up to 8% of earnings when rules change in April next year. “Hargreaves Lansdown have found half of people can already be helped to voluntarily increase their contributions, so the challenge is to improve on this as savings continue to grow.”Bruce Kirton, chief executive of Welplan Pensions called for more engagement with pension savers to boost contributions. “The industry needs to place additional focus on engaging with its membership to encourage them to save more into their pensions. “That starts with using a pension provider, who knows how to speak the same language as its members, giving them to the option to talk to a real person at the end of a phone,” he said.

Record numbers enrolled in occupational pension schemes

Related items

News from Twitter