Kate Smith, Head of Pensions at Aegon said: “Today’s ONS figures paint a positive picture overall, with workplace pension participation reaching a record high of 73%, with 9.5 million people now automatically enrolled into a pension scheme.
“The numbers point to the fact that auto-enrolment is working. From the outset the aim of auto-enrolment was to target those who may previously not have invested in a pension and those on low income. In this respect it’s good news with the proportion of employees contributing to a workplace pension jumping by a quarter. More lower income and younger individuals than ever before now have an active workplace pension.
“While progress is good, too many people, and employers, are paying too little. There is some way to go to encourage increased contributions across the board.”
Andy Tarrant, Head of Policy at The People’s Pension commented: “While today’s figures from the ONS confirm continued progress in the auto-enrolment project, average contribution levels remain low. Notwithstanding the April increases to minimum contribution rates for both employers and employees - which marked a critical next-step for UK workplace pensions saving - the decline in average contribution rates since 2012 should be cause for concern.
Driving home key messages around the importance of long-term savings, the power of compound interest and personal accountability must remain a priority for both the pensions industry and employers.”
John Wilson, Head of Technical, JLT Employee Benefits: “It’s great that auto enrolment has exceeded expectations in terms of getting more workers in to a pension schemes. However, we now have to confront the fact that we are still not saving enough in the UK either in pensions or other forms of savings and investments. Although AE has brought millions more into workplace pensions, a greater focus needs to be given to wider financial wellbeing in the workplace. Financial concerns not only impact the amount employees are likely to save into their pensions, but can lead to broader productivity problems for businesses in the UK.”
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