Percentage of employees in DC schemes with employer contributions of 0-4% doubles but with knock-on effect that the percentage of employees in DC schemes with employer contributions of 12% or more is almost halved.
The National Association of Pension Funds (NAPF) today (Monday) commented on the ASHE Pension Tables released on Friday, 14 March 2014.
Joanne Segars, Chief Executive, NAPF, said:
“It is very encouraging to see the participation rate in workplace pensions is rising and nudging 50% - no doubt due to the three million workers who have been automatically enrolled into a workplace pension scheme. It is great to see more people saving for their retirement, but it’s essential to remember that this is only half the picture and it’s worrying to see the percentage of employees who are in defined contribution (DC) schemes with an employer contribution of over 12% has almost halved.
“Under the rules of automatic enrolment from 1 October 2018, all employees must receive minimum pension contributions of 8%, with at least 3% coming from the employer. Making sure that people truly understand what constitutes an adequate contribution rate to secure a decent income in retirement will play a pivotal role in the long term success of automatic enrolment. As contributions edge up to 8% in the next few years it will be vital that people understand the value and necessity of increasing their contribution rates, as this will help them prioritise long term saving over short term spending.”
Notes to editors
The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,300 pension schemes with some 16 million members and assets of around £900 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.
The NAPF has a suite of materials about Automatic Enrolment available on its website, free for employers to use, http://www.napf.co.uk/Automatic-Enrolment
Lucy Grubb, Head of Media and PR, NAPF, 020 7601 1726 or 07713 073023, [email protected]
Eleanor Bennett, Press Officer, 020 7601 1718 or 07825 171 446, [email protected]