Slight rise in number of people paying into workplace pensions

The number of people paying into workplace pension schemes has increased slightly during the pandemic, in part driven by a rise in people working in the public sector.

pensions, saving for retirement

 

The percentage of people paying into workplace pensions  has increased slightly in the last year – up to 79% in 2021 from 78% in 2020, according to a report from the Office for National Statistics [ONS].

This is partly explained by increased public sector employment driven by the government’s response to the coronavirus pandemic. However,  the gap in employee workplace pension participation rates between the public (91%) and private sectors (75%) has fallen, mainly driven by increased participation in the private sector up from 32% in 2012.

The ONS says employee participation in workplace pensions reflects the automatic enrolment (AE) age (aged 22 years to State Pension age) eligibility; in April 2021, around eight in 10 eligible employees had a pension compared with two in 10 employees aged 16 to 21 years, and four in 10 aged State Pension age and over.

The figures show there is still room for improvement, particularly for lower paid employees in the private sector. In April 2021, workplace pension participation was the lowest for private sector full-time employees earning £100 to £199 per week (43%). This is likely to be due to AE earnings and age eligibility criteria. Participation was 88% for equivalent earners in the public sector.

Accommodation and food services was the sector with the lowest participation rate in April 2021 (51%), but saw one of the largest increases (46 percentage points) in any industry since April 2012. The ONS says the participation rate reflects the age and income profile of many employees in this industry.

By working pattern, the figures show 87% of full-time employees are participating in a workplace pension versus 61% of part-time employees. In April 2021, the gender gap in employee workplace pension participation for part-time employees was larger, with 65% of women and 49% of men participating. This was in part due to more part-time women being in public sector roles. A higher proportion of part-time public sector employees had a workplace pension compared with the private sector, at 84% and 50% respectively.


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