Pensions - Articles - Participation in workplace pensions holds steady

Emma Douglas, Director of Workplace Savings & Retirement at Aviva comments on the Department for Work and Pensions (DWP) ‘Workplace pension participation and savings trends: 2009 to 2021’ figures.

 “The resilience of UK workers is something to celebrate. Despite the challenges created by the pandemic, the percentage of workers saving into their pension held steady at 88% of all eligible workers last year. Over 20 million eligible workers saved £114.6 billion into workplace pensions in 2021, up £2.9 billion from 2020. Today’s figures show how hard-pressed workers continued to rank the importance of their pension throughout the pandemic.

 “Today’s figures also reveal a startling gap in the pension contributions of men and women. Women in the private sector benefit from total contributions (2) of 25% less per year than their male colleagues. This is £1,500 on average for eligible female workers versus £2,010 for eligible male workers.”

 Aviva calls for ‘roadmap’ to removing auto-enrolment thresholds
 One significant change government could make to help women in this position would be to remove the automatic-enrolment (AE) lower qualifying earning threshold (LET). It would mean those in a pension scheme would get a contribution from the first pound they earn. It can be implemented without the need for legislation and has already been promised by government for the “mid-2020s”.

 Emma Douglas said: “Now is not the time to make changes to contribution rates but we shouldn’t overlook the opportunity to set a course for the future. We welcome the recent freeze of the lower qualifying earnings threshold (LET), particularly because we support a phased approach to its eventual removal.

 “We are calling on government to put a ‘roadmap’ in place now for how and when it will implement the removal of the LET. A phased approach should help to ease any sudden financial impact on employers and employees. Employers and employees need time to plan.”

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