Are we part of a pensions revolution?

The latest figures from the Department for Work and Pensions (DWP) show that the number of people saving into a workplace pension has hit an all-time high, with 17.7 million people actively participating last year.

More than 80 per cent of eligible employees participated in workplace pension schemes in 2017, up from 77 per cent in 2016, with the private sector participating rate climbing nine points to 81 per cent. In the public sector, active membership grew from 91 per cent to 92 per cent.

The figures are significantly higher than before the introduction of auto-enrolment (AE) in 2012. In 2011, just 42 per cent of private sector workers were saving, while the overall saving rate, including public sector, was 56 per cent or 11 million people.

The figures also show that around £90.3 billion was saved in 2017. Of this, £49.8 billion in total was saved by private sector employees, with £15.3 billion coming from employee contributions, £29.3 billion from employer contributions, and the remainder from tax relief.

The figures also show that the industry with the largest growth in membership between 2016 and 2017 was agriculture and fishing, with the rate growing from 44 per cent to 68 per cent. This is due to many employers in this industry being small or micro and not being required to auto-enrol employees until late into staging, which concluded in February this year.

Commenting on the figures, Work and Pensions Secretary Esther McVey said that the introduction of automatic enrolment has started “a pensions revolution, allowing more people to plan for retirement”.

However, while people are saving, there are concerns that they are not saving enough, as separate figures show that the average private sector worker’s pension contribution last year hit a record low of £3,873, down considerably from £6,782 in 2012.