Workplace pensions – a good start but not enough


Workplace pension autoenrolment, proof that some grand government schemes can be a success.

Auto-enrolment has hugely increased the number of people in workplace pensions. By April 2018, nearly nine out of ten eligible employees were workplace pension members (85% in the private sector, 93% in the public sector), according to recently issued fi gures from the Department for Work and Pensions (DWP). Pension contributions for employees are still too low, however, and need to be increased, as the government acknowledged in a review issued late in 2017. The review suggested that around 12 million people were “under-saving for their retirement”, with most of those under-savers earning more than £25,000 a year. Higher earners are more likely to be not contributing enough because there is no longer any earnings-related element to the state pension.

One sector of the working population has been left untouched by auto-enrolment – the selfemployed. Their numbers have been growing rapidly, but their pension participation has seen a continuous decline from 27% in 2008/09 to just 15% in 2017/18.

The government will probably find some mechanism to raise minimum contributions again, although this may not happen until the middle of the next decade. In the meantime:

■ If you are an employer, remember that every three years you must re-enrol any employees who have left your pension scheme.

■ If you are an employee, talk to us about whether you need to pre-empt that contribution increase to meet your retirement goals.

■ If you are self-employed, make sure that you are not among the 85% making no pension contributions.


The value of your investments, and the income from them, can go down as well as up and you may not get back the full amount you invested.

Past performance is not a reliable indicator of future performance.

Investing in shares should be regarded as a long-term investment and should fi t with your overall attitude to risk and financial circumstances.


Go back to the full list of articles

The information in this article does not constitute advice and should be used for informational purposes only. This content has been provided to Helm Godfrey by Taxbriefs.