The coronavirus pandemic has not derailed the drive to encourage individuals to save lots of into office pensions, specialists have mentioned.
However they warned the “largest take a look at is but to return”, with the cost-of-living disaster doubtlessly growing the chance that extra pension savers might decide out.
Almost 9 in 10 (88%) eligible staff, or round 20 million, had been taking part in a office pension in 2021, based on Division for Work and Pensions (DWP) figures launched on Tuesday.
Total traits in participation have elevated since 2012, the yr that automated enrolment into office pensions began.
This has been pushed by the personal sector, whereas public sector participation has remained excessive, the DWP mentioned.
The very best ranges of each personal and public sector pension participation in 2021 had been seen amongst bigger employers.
Participation charges amongst staff of smaller companies within the personal sector have elevated since 2012 however there’s a persistent hole in participation charges in contrast with different sized employers, the DWP mentioned.
Throughout the entire economic system, participation charges for eligible staff in 2021 had been highest amongst individuals aged 40 to 49 (90%) and lowest for individuals aged 22 to 29 (86%).
There had been a basic downward pattern in office pension participation amongst eligible staff between 2009 and 2012, from 58% (11.4 million eligible staff) to 55% (10.7 million eligible staff).
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, mentioned: “The pandemic has introduced monetary turmoil for many individuals, with considerations we might see individuals pressured to cease their pension contributions as they battle to make ends meet.
“Thus far, we’ve seen no dramatic spike within the variety of individuals making an energetic choice to cease their pension contributions in 2021/22, with solely 0.6% of eligible staff opting to take action – the identical degree because the earlier yr and barely beneath pre-pandemic ranges.
“Nonetheless, whereas we might have weathered one storm, the challenges proceed, and whether or not individuals can decide to conserving their pension contributions going as we face the largest cost-of-living disaster in residing reminiscence stays to be seen.”
Kate Smith, head of pensions at Aegon, mentioned: “Covid didn’t derail auto-enrolment, however the largest take a look at is but to return with the all-consuming cost-of-living disaster.
“There’s an actual threat that staff could possibly be tempted to cease their pension contributions, as they make pressured monetary selections to make ends meet.
“That is more likely to result in employer contributions additionally stopping, so needs to be a final resort.”
Phil Brown, director of coverage at B&CE, supplier of the Individuals’s Pension, mentioned: “All through the pandemic, office pension opt-out and cessation charges stayed comparatively steady and we count on that to stay the case throughout the present cost-of-living disaster.
“Whereas we champion the very many advantages of office pensions, they gained’t all the time be an possibility for everyone, so would all the time encourage people to make such monetary selections primarily based on their private circumstances.”
Minister for pensions Man Opperman mentioned: “It’s encouraging to see that, regardless of the appreciable challenges of the previous few years, general participation in office pensions amongst eligible staff has remained steady and complete contributions have elevated in actual phrases.
“Because of the success of automated enrolment, a report variety of Brits are actually saving for retirement and our ambition for the way forward for AE (automated enrolment) will allow much more individuals to save lots of extra and to start out saving earlier.”