Auto-enrolment boosts saver numbers

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Undated handout photo issued by the Pensions Regulator of (left to right) Michael Kerr, West Ham United (WHU) HR director, Julie O'Leary, WHU sponsorship executive, pensions minister Steve Webb, Dougie Robertson, WHU head groundsman,  Esha Chopra, WHU media marketing executive and Charles Counsell, automatic enrolment executive director at the Pensions Regulator as West Ham football club has helped push the total number of people who have started putting money into a workplace pension to the latest milestone of three million. PRESS ASSOCIATION Photo. Issue date: Wednesday March 12, 2014. See PA story MONEY Pension. Photo credit should read: Pensions Regulator /PA WireNOTE TO EDITORS: This handout photo may only be used in for editorial reporting purposes for the contemporaneous illustration of events, things or the people in the image or facts mentioned in the caption. Reuse of the picture may require further permission from the copyright holder.

More than three million people have started putting money into a workplace pension due to the Government's landmark reforms to head off a looming retirement savings crisis.

Football club West Ham United, whose vice chairman Karren Brady has backed the scheme in high-profile advertising campaigns, helped push the total number of people who have been automatically placed into a pension to the latest milestone.

The figures, which were released by the Pensions Regulator, showed that more than 10,000 employers have now automatically enrolled their workers, including charities, supermarkets and hospitals.

Automatic enrolment started in autumn 2012, with the largest firms placing their employees into a workplace pension and the scheme will roll out over a six-year period, until the smallest employers, which tend to have less experience of pensions, have joined up.

The scheme was introduced to tackle fears that people are living for longer but are not saving enough for a comfortable retirement, with just one in three private sector employees paying into a workplace pension.

People can opt out of the pension once they have been auto-enrolled, but so far around nine in 10 workers are staying in.

Tens of thousands of medium-sized employers will become part of the scheme this year and by the time the initiative is rolled out up to 11 million people will have been placed into a work-based pension scheme.

Ms Brady, who is also known for appearing as Lord Sugar's aide in the BBC's The Apprentice, said:
"West Ham United is pleased to be supporting the auto-enrolment scheme.

"It is becoming increasingly important for people to plan for their future at an earlier age. The scheme should help to make a real difference to the retirement prospects of some of the unsung stars at our club."

Concerns have been raised that auto-enrolment must not lead to people being placed into hard-to-understand pension schemes which fail to make the most of their savings, particularly as smaller firms which have less experience of pensions are brought into the initiative.

The Government has been considering placing a cap on charges which gobble chunks out of pension savings pots, but it has said that any cap will not take place before April 2015, to give firms time to adjust.

Pensions minister Steve Webb said: "We have kicked off a savings revolution that will benefit millions in their retirement."

The Pensions Regulator's website - thepensionsregulator.gov.uk - has a tool for employers to check when they are due to join the auto enrolment scheme and another to help them plan ahead to avoid unnecessary costs.

Charles Counsell, executive director of automatic enrolment at the Pensions Regulator, said:
"Thousands of employers need to act now and get match fit for their automatic enrolment deadline in the coming months."

TUC general secretary Frances O'Grady said: "Auto-enrolment is a real pensions revolution. For the first time in history employers now have to make pension contributions for their staff.

"But while we should salute its success, contribution rates are still too low to deliver the pensions that most would want. It has been right to phase auto-enrolment in to give employers and workers a smooth entry, but over-time minimum contributions should increase.

"The Government should stop taking low paid workers out of auto-enrolment by raising the earnings trigger every time they increase the personal allowance."

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