The latest data from ONS has revealed that total membership of occupational pension schemes in the UK was 39.2 million in 2016, the highest level recorded by the survey, representing an increase of 17.1% compared with 2015.
According to the analysis, active membership of occupational pension schemes was 13.5 million in 2016, split between the private (7.7 million) and public sector (5.7 million). Total number of preserved pension entitlements increased from 11.8 million in 2015 to 15.4 million in 2016.
Active membership of private sector defined contribution schemes was 6.4 million in 2016, representing an increase of 62.5% on 2015 levels (3.9 million).
In 2016, for private sector defined contribution schemes, the average total (member plus employer) contribution rate was 4.2%, broadly comparable with 2015.
Ross Andrews, director of fixed rate bond provider, Minerva Lending, said: “Auto-enrolment, based on this evidence, is having the desired effect. More people are now actively putting aside money for their retirements, and it’s this which is going to help the UK defuse the impending pensions time bomb.
The country is getting older and if we aren’t saving, the strain on the public purse could become overwhelming in the coming years. The fact that the employment market is as strong as it is will also be a factor in the rise in active membership. More people in jobs means more people paying into pensions.
The added dividend from all this activity will hopefully be a better attitude to saving in general.
It may be enough to spark a cultural wave, prompting the broader habit of saving and investing for the future among far greater proportions of the population."
Vince Smith Hughes, Retirement Expert at Prudential said: “The increase in the number of people joining company pensions schemes shows the success of auto enrolment and also how people increasingly recognise the need to provide for their own retirement. The number of people retiring without a pension has fallen significantly over the last 10 years and people retiring now tell us that they expect to live on about £18,000 a year.
Prudential research shows auto-enrolment is encouraging people to make better plans for retirement with nearly three out of ten people admitting that they could save an additional £100 a month. That’s good news because over the past 10 years responsibility for providing a retirement income has shifted from away from Government to individuals and the best approach is to save as much as you can as early as you can.”