As UK Employment Increases, So Does Pension Saving

23 August 2017

Pension Saving increases Thanks to new figures available this week from the Office for National Statistics, it was revealed that the number of people in the UK in work is at the highest level since records began in 1971. This, in turn, should almost certainly boost pensions savings.

The figures from the Office for National Statistics indicate that the employment rate in the UK is at a record high of 75.1%, which represents 32.07 million people now in work which is an increase of nearly 340,000 from the year before.

Thanks to auto enrolment, whenever there is an increase in employment in the UK, there almost certainly is a boost in pension savings. This is because, for those that are eligible now in the UK, as soon as they begin a job, they are automatically enrolled into a workplace pension scheme, with the vast majority of people choosing to stay in it rather than opt-out.

However, there are some caveats to the new figures. Whilst there is undoubtedly a boost in the numbers of people in employment, many of these could be low earners as well as being one of the growing numbers of people in self-employment or working as part of the gig economy. These individuals are therefore not suitable for auto enrolment and they do not benefit from an employer contribution, a valuable boost to pension saving.

Widening access to auto enrolment does seem to be a priority for the government though, and when a question was asked in July, a government spokesperson said that:

"With nearly 8 million people now saving into a workplace pension, automatic enrolment continues to be a huge success. Our ongoing review is looking at how we can build upon this ground-breaking policy, including how to meet the needs of the self-employed in saving for a financially secure retirement."

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    • Sp avatar Brett Cranfield

      Brett Cranfield, previously a Private Banking Manager for the UK Wealth division at Lloyds Banking Group, he managed a diverse portfolio …