Pensions - Articles - Workplace pension rate up from 78 to 79 percent in 2021

 “The good news is that the pension participation rate is at a record high at 79% of employees, with 22.6 million employees saving in a workplace pension in April 2021. Encouragingly, the pension participation gap is continuing to narrow between the public and private sector driven by increased participation into private sector defined contribution schemes – a clear indication that auto-enrolment is working. And the gender participation gap is narrowing for full time employees, with females leading the way.

 “However, the latest data clearly shows that more work needs to be done to help low earners and younger employees save into a pension. Only 20% of employees aged between 16 and 21 are in a pension scheme and the pension participation rate in the private sector was only 43% for those earning between £100 and £199 a week, compared to 88% in the public sector. This shouldn’t be a surprise given these groups are largely excluded from auto-enrolment. Employees need to have reached the age of 22 and earn over £192 per week to be auto-enrolled into a workplace pension scheme.

 “Many employers will open up their workplace scheme to all employees, although others will just follow the letter of the law, doing the bare minimum, and exclude these groups. Implementing the 2017 reforms of auto-enrolment will go some way to addressing this issue, as the minimum age will be reduced to age 18 and anyone earning below the £10,000 earnings trigger should be able to ‘opt-in’ and receive an employer pension contribution.”
  

 Employee workplace pensions in the UK: 2021 provisional and 2020 final results