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90% remain in workplace pension

90% remain in workplace pension

Category: Pensions

Updated: 08/08/2013
First Published: 08/08/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Government's auto-enrolment pension initiative has been hailed a "success", with early research showing fewer than 10% of UK workers have opted out of the scheme.

The first official research, conducted by the Department for Work and Pensions (DWP), revealed that 90% of employees have remained auto-enrolled in a workplace pension since October last year.

The DWP also said that young people are leading the way in the pension savings revolution, with more under 30s staying in a pension scheme compared to all other age groups.

Auto-enrolment is part of the Government's drive to address the pensions crisis and encourage more people to invest in their futures by placing money into a pension scheme.

Over the course of the next five years, businesses of all sizes will be required to auto-enrol their employees into a pension scheme.

The Government states that employers must contribute a minimum percentage of 2% of earnings, made up from 0.8% from employees, 1% from the employer and 0.2% as a result of tax relief.

So far, however, it is still early days for the initiative, with only the biggest companies (over 250 employees) being required to implement auto-enrolment. Medium-sized firms will have to start auto-enrolling employees from April next year, while small businesses with 49 workers or less will be required to implement the changes from May 2017.

"Too few people have been saving for retirement. It is all too often something to be put off, something for tomorrow," said Pensions Minister Steve Webb.

"These figures show that people really value the chance to save into a workplace pension as they know they will also get money from their employer and the taxman too."

What next?

Find out how to get the best income in retirement
Learn about your annuity options

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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