Employees expected to save £15 billion each year into workplace pensions
Workers are expected to save billions of pounds more into their workplace pensions than previously thought, according to Government figures.
An update on the flagship drive to automatically place people into pensions found that around £15 billion is now expected to be saved in a workplace pension each year from 2019/20 – the first year that the scheme is fully rolled out. This compares with a previous estimate of £11 billion being saved every year.
A key reason for the increase is a strong appetite for pension saving among employees. So far, a higher than expected rate of nine in 10 people are staying in their pension after being automatically enrolled.
By the time the roll-out is complete, it is estimated that nine million workers will be either saving into a workplace pension for the first time, or saving more.
However, only around three to four million of these workers will be women, according to the predictions. The document, released by the Department for Work and Pensions (DWP), said that this reflects underlying labour market factors, such as earnings and working patterns.
Auto-enrolment started in 2012 amid fears that people are living for longer but not saving enough for their old age.
So far over 5.4 million people have been automatically enrolled. Workers are eligible if they are at least 22 years old and under state pension age, earning over £10,000 a year and work, or usually work, in the UK.
Minister for Pensions Baroness Altmann described the new £15 billion-a-year estimate as “fantastic news and further proof that people recognise the future rewards that can be reaped from saving into a pension”.