Figures published today by the ONS show that pension participation hit 78% in April 2020 highlighting the success of auto enrolment but 2020 also marks the first time that participation rates have remained unchanged since roll out started in 2012.
James Carter, Head of Pension Products & Policy at Fidelity International commented: “Today’s figures from the ONS show that the proportion of employees with a workplace pension has grown substantially to nearly eight out of ten (78%) since automatic enrolment was introduced in 2012. However, the data also shows that following the events of the last year there has been a plateau in participation rates. Fidelity’s research has revealed that 23%1 of people experienced a fall in income through the pandemic and pressures on household incomes may have prompted some people to drop out of workplace schemes with the need for more disposable income. What’s encouraging is that there wasn’t a bigger drop in participation in the first few months of the pandemic, but the impact through the rest of the year is yet to be seen.
“From here it is all about the next stage of automatic enrolment and improving engagement. Expanding the basis for minimum contribution rates and supporting those who might have dropped out of schemes to re-enrol are priorities, but so is increasing the focus on tackling pension savings gaps across different working populations. We need to focus on how workplace and private pensions can better support women’s contribution levels, the self-employed and those with multiple part-time jobs – an increasing and important component of the working population. Automatic enrolment has been a huge success, but is only a foundation and we must continue our work to ensure consumers are aware of their options when it comes to workplace and private pensions.”