Saving into pension through work 'now seen as normal'

Workplace pension saving has become "the norm" for many employees, according to research released by the Government.

More than four in five (83%) employees eligible for automatic enrolment now see saving through a workplace pension as the normal step to take if you work.

Some 80% of employees are positive about the benefits of them being enrolled onto a workplace pension, while 83% feel they know where to go to find out more information.

And 79% of those with workplace pensions would welcome increasing their savings alongside employer contributions.

The Government is currently reviewing how to continue to build upon the success of automatic enrolment and how to encourage as many people as possible to save into a workplace pension. The review will report to Parliament by the end of 2017.

Minimum automatic enrolment contributions will increase to 5% in 2018 and 8% in 2019, the Government has previously said.

Employees are generally eligible for auto-enrolment if they are aged between 22 and the state pension age, earning £10,000 per year or more and working in the UK.

The survey of  more than 1,400 eligible employees included people who have been enrolled and those who are due to be.

Automatic enrolment started in 2012 as part of efforts to boost the savings culture, amid concerns that people are living for longer but not putting enough money aside for later life.

The scheme started with the biggest firms, which tend to have more experience of pension saving, and it is now being rolled out among small employers.

By 2018, when the roll-out is complete, it is expected that up to 11 million people will be newly saving or saving more as a result.

The proportion of people staying in their pension rather than opting out has also been higher than had been expected, with around nine in 10 people remaining. 

The Pensions Regulator recently announced that 8.3 million people have been automatically enrolled onto a workplace pension by nearly 700,000 employers.

Figures from the Office for National Statistics (ONS) last week also showed how saving into a private pension can make a big difference to incomes later in life. 

By 2016, retired households receiving a private pension had disposable incomes that were around 1.6 times higher than households that were not. Workplace pensions, individual personal pensions and annuities were classed as private pensions in the ONS's research.

Pension experts said last week that, with rises in the state pension age and an ageing population, people need to realise that the responsibility for pension saving is on their shoulders. 

Work and Pensions Secretary David Gauke said: "Automatic enrolment has been a huge success, helping millions more people save into a workplace pension.

"These figures underline the fact that saving for a pension has become the new normal with people from all walks of life embracing it.

"A private pension should not be a privilege, it should be something that the vast majority can work towards to complement the state pension in later life."

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