DWP modelling shows that with automatic enrolment median private pension income could rise to between £153 and £195 a week by 2070. Without these reforms, median weekly private pension income would only reach between £86 and £106.
The research, “Workplace Pension Reforms: Baseline Evaluation Report”, describes the pensions landscape before automatic enrolment is introduced this year, and employers’ preparation for the reforms.
Key findings are:
Nearly three quarters of large employers support automatic enrolment;
- Private sector pension participation has fallen from 7.9 million (55 per cent) in 2003 to 5.8 million (42 per cent) in 2011;
- Low earners, individuals working for small and micro employers and those aged 22 to 29 show steep declines in pension participation;
- Private sector workplace pension saving has fallen from £39.3 billion in 2007 to £35 billion in 2011.
Pensions Minister Steve Webb said:
“This October we will introduce the most important changes in pensions for a century to help people save and avert a pensions crisis in the future.”
“We are living longer yet 11 million of us are not saving enough for retirement.”
“Automatic enrolment will reverse this trend as millions will have a workplace pension and could double their private pension income, on top of a reformed state pension.”
The research will be updated every year to track the impact of automatic enrolment.