The UK government sees reason to be pleased with the progress of its auto-enrolment programme. According to data from The Pension Regulator (TPR), 2,877,000 UK employees joined a workplace pension scheme between July 2012 and the end of January 2014.
A TPR spokesperson said that nearly 9,000 employers are currently in compliance with auto-enrolment regulations. In some months of 2014 TPR expects to see a ten-fold increase in the number of employers enrolling their workforce compared to the uptake rate in 2013, International Business Times (IBT) reported. The regulator also estimates that 3,616,000 workers have yet to be auto-enrolled, while inclusion has been deferred for another 406,000.
described TPR’s data as good news, adding that automatic enrolment will allow millions of UK workers to safeguard their future.
The programme will run until April 2017, by which time UK employers should have all their eligible workers enrolled in a pension scheme. A spokesperson for the Department for Work and Pensions described TPR’s data as good news, adding that automatic enrolment will allow millions of UK workers to safeguard their future.
The auto-enrolment programme has made a promising start and opt-out rates have been lower than many had anticipated. Nevertheless, some experts believe that the pension contributions are not big enough. According to Tom McPhail, who runs pensions research at investment firm Hargreaves Lansdown, most people contribute too little. In 2018 the minimum contribution will reach 8% of earnings, the rate for employers being 3%, for employees 4% and 1% coming from tax breaks. But McPhail believes this is still not enough. Unless contributions are bigger, people will not enter retirement with a reasonable income to support themselves late in life, he told the IBT.