According to new statistics released this week, one in eight people retiring in the UK this year have no private pension savings. The figures revealed that 12% of people who are planning to retire this year have no private pension savings of their own. Women in particular are worse-off, with nearly one in five (18%) having no pension savings.
However worrying the figures are, they are big improvement on the situation ten years ago, where 23% of people retired with no private pension savings. The improvement has come mainly thanks to the introduction of auto enrolment, where all eligible workers are auto enrolled into a workplace pension scheme. Starting in 2012 under the coalition government, it has seen millions of people begin saving for their retirement, with just 9% choosing to opt-out, far less than estimated when the scheme began. Those who have been auto enrolled will also begin to save more from this month when the combined minimum contribution from employees and employers rises from 2% of qualifying earnings to 5%, rising again in April 2019 to 8%. Although it is thought that this might increase the opt-out rate slightly, it is thought that the vast majority of savers will continue with their workplace pensions.
Guy Opperman, Minister for Pensions and Financial Inclusion, said: "We have already reversed two decades of declining pensions saving through automatic enrolment, with more than 9.3 million people now newly saving or saving more for retirement."
"But there is still more to do to ensure that everyone is building up good private pension savings. This is why we are increasing contributions in April, and we have recently announced a package of measures to ensure that even more people benefit from a workplace pension."