Record numbers save in pensions ‘revolution’ | Retirement | Finance



The number of savers aged under 30 are now at their highest level (79 per cent) and virtually in line with other ages.

Since 2012 employers have had to auto-enrol workers into a company , saving a minimum of five per cent of earnings.

Work and Pensions Secretary Esther McVey said: “By the introduction of automatic enrolment we have started a savings revolution, allowing more people to plan for retirement.”

Former pensions minister Steve Webb, director of policy at Royal London said: “The first phase of automatic enrolment has been a stunning success.

“Nearly 10 million more people are saving in a workplace pension compared with 2012, and the growth has been particularly marked among younger workers, women and those in smaller firms – all groups who have traditionally had low levels of pensions.”

Employers paid in £53.8billion to workplace pension schemes in 2017 while employees contributed £27.5billion.

Tax relief contributes another £9billion to the total.

Participation was highest in the energy and water sector (91 per cent) and lowest in agriculture and fishing (69 per cent).

Professional occupations had a higher participation rate (89 per cent) compared with 77 per cent of tradesmen such as plumbers, carpenters and welders.

But while more people are saving for old age, there are concerns they are not saving enough.

The average private sector worker’s pension contribution last year hit a record low of £3,873 – down from £6,782 in 2012.

Public sector pension savings rose from £8,404 in 2016 to £8,414 in 2017.

Overall, the average of £5,110 was the lowest on record.

Alistair McQueen, of Aviva, said: “The need to accelerate the increase in minimum savings levels is becoming more urgent.

“The minimum is set to reach eight per cent of earnings from April 2019, though we advocate a rise to at least 12.5 per cent of earnings by 2028.”


Source link