Workplace pension reforms – 2,877,000 extra workers now saving for retirement

13th February 2014

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The latest figures from the Pension Regulator show that 2,877,000 people have enrolled into a pension scheme who were not in a scheme before. The numbers are getting close the three million mark and represent a huge extension to the numbers paying into a pension since the reform roll began in July 2012.

Nearly 7.5 million were already in a pension scheme at the time of the staging data, while others – some 406,000 members of defined benefit or hybrid schemes –  have not enrolled yet because their employers have been allowed to delay enrolling the whole workforce until 2018.

Workers who do not fall into these categories, for example because they may not be earning enough, is calculated at 3,616,000 by the TPR.

TPR

 

Source: The Pension Regulator

However pension experts have warned that the amount employees are setting aside for their retirement is unlikely to be enough to replace their income.

Tom McPhail, Head of Pensions Research, Hargreaves Lansdown, “Auto-enrolment is off to a good start and the numbers joining pension schemes is promising. Unfortunately most people are not contributing enough. Even in another 4 years’ time when they are up to the minimum of 8% of earnings, it still won’t be enough to provide a reasonable income in retirement. Employees should use auto-enrolment as the catalyst to kick start their savings and put themselves in the best position to enjoy a financially secure retirement.”

Other experts say this remains an important first stage that can be built upon.

Jelf head of benefits strategy Steve Herbert says: “The 3 million mark is significant.  It shows that the legislation is starting to bite, and that the UK is well on the way to a collective move towards retirement savings.  This is good news. Yet the doom-merchants are right to flag that the levels of savings are far too low, and in many cases unlikely to produce a significant pension outcome for the saver.”

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