Automatic Enrolment has enabled Scots to put more into their pension pots than ever before, according to new figures released by the Department for Work and Pensions (DWP) to mark 10 years since the policy was introduced. In 2021, employees across the UK saved £114.6 billion into their pensions, a real-terms increase of £32.9 billion compared to 2012, when Automatic Enrolment was introduced.
In Scotland, 88 per cent of private sector employees were in a workplace pension in 2021, an increase from 44 per cent in 2012. Across the country, workplace pension participation rates in the service industry alone - such as hotels, restaurants, and distribution - has increased by 63 percentage points since 2012.
The figures reveal how the policy has transformed pensions saving over the last 10 years for people, with 9.3 million more employees paying into a workplace pension in 2021.
The figures also show how the policy has transformed pensions saving over the last 10 years by:
- Normalising workplace pension saving
- Establishing a culture of retirement saving for a new generation
- Helping foster a greater sense of security in later life
More than 10.7 million employees were paying into a workplace pension in 2021, with the proportion of women saving into a workplace pension, be it public or private sector, jumping by about 50 per cent since 2012.
Young people have also benefited, with those aged 22 to 29 saving into a workplace pension more than doubling in the same time period.
Commenting on the report, Minister for Pensions, Laura Trott, said: “Automatic enrolment has completely transformed how people save - with staggering results. In the 10 years since its introduction, 10.7 million people have started saving for their pensions with this easy to use scheme.
“We have also seen a huge and much needed increase in women and young people being enrolled into a pension.
“Automatic Enrolment is doing its job - helping more people save more so they can do more in retirement.”
Retail Entrepreneur and Dragons' Den investor Theo Paphitis said: “In the 10-years since I was involved in the launch of Automatic Enrolment, pension saving in the UK has gone from strength to strength with more than two million workplaces signed up - this is something to celebrate.
“It is right that employees are given the chance and encouragement to save and I am proud for my businesses to be involved. The evidence is there that people are indeed saving more and benefitting immensely.”
Nest’s CEO, Helen Dean, CBE, said: “Over the past 10 years, automatic enrolment has completely changed the UK’s saving landscape, bringing millions of new people into pensions saving, many for the first time. It’s taken a lot of hard work and dedication, from the people who develop the policy, to schemes across the pensions industry, and employers up and down the country.
“It's been a privilege for Nest to be part of this retirement revolution and we look forward to the innovations we will achieve together over the next 10 years”
The anniversary was marked by a celebratory event, attended by those who have made Automatic Enrolment a success including businesses, employers, pension providers and regulatory bodies.
Following the success of the Automatic Enrolment, the UK Government intends to continue its work with thousands of employers and pension providers to further boost the amount of people in a workplace pension.
It will also continue its work on empowering savers to know their pension options by introducing revolutionary products such as Pensions Dashboards and Mid Life MOT’s, providing accessibility and innovation in how people save for their retirement.
And now that a record number of people are saving for retirement, the UK Government is exploring how Automatic Enrolment can go even further to help more people save more, sooner, by abolishing the Lower Earnings Limit for contributions and reducing the eligible age to 18.
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