The coronavirus pandemic has not derailed the drive to encourage folks to avoid wasting into office pensions, consultants have stated.
However they warned the “greatest take a look at is but to come back”, with the cost-of-living disaster probably growing the danger that extra pension savers may decide out.
Practically 9 in 10 (88%) eligible workers, or round 20 million, had been collaborating in a office pension in 2021, in response to Division for Work and Pensions (DWP) figures launched on Tuesday.
General tendencies 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 stated.
Covid did not derail auto-enrolment, however the greatest take a look at is but to come back with the all-consuming value of residing disaster
Kate Smith, Aegon
The best ranges of each personal and public sector pension participation in 2021 had been seen amongst bigger employers.
Participation charges amongst workers 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 stated.
Throughout the entire financial system, participation charges for eligible workers in 2021 had been highest amongst folks aged 40 to 49 (90%) and lowest for folks aged 22 to 29 (86%).
There had been a common downward development in office pension participation amongst eligible workers between 2009 and 2012, from 58% (11.4 million eligible workers) to 55% (10.7 million eligible workers).
To this point, we have seen no dramatic spike within the variety of folks making an lively resolution to cease their pension contributions
Helen Morrissey, Hargreaves Lansdown
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, stated: “The pandemic has introduced monetary turmoil for many individuals with considerations we may see folks pressured to cease their pension contributions as they wrestle to make ends meet.
“To this point, we’ve seen no dramatic spike within the variety of folks making an lively resolution to cease their pension contributions in 2021/22 with solely 0.6% of eligible workers opting to take action – the identical stage because the earlier yr and barely beneath pre-pandemic ranges.
“Nevertheless, whereas we might have weathered one storm the challenges proceed and whether or not folks can decide to conserving their pension contributions going as we face the most important cost-of-living disaster in residing reminiscence stays to be seen.”
Kate Smith, head of pensions at Aegon, stated: “Covid didn’t derail auto-enrolment, however the greatest take a look at is but to come back with the all-consuming value of residing disaster.
“There’s an actual threat that workers might be tempted to cease their pension contributions, as they make careworn monetary choices to make ends meet.
“That is more likely to result in employer contributions additionally stopping, so needs to be a final resort.”
