The National Association of Pension Funds (NAPF) commented on official figures published today (Friday) showing that the number of employees saving into a workplace pension has fallen to a record low of 48%.
This is the first time the proportion has fallen below 50% since the Office of National Statistics research started in 1997, when the figure was 55%.
Darren Philp, NAPF Policy Director, said:
“We’ve passed an important and worrying landmark. Less than half the workforce is now saving into a pension, and with people living longer the UK is facing a growing headache in paying for its old age.
“It is encouraging that saving has held up in the public sector. But it is a worrying picture in the private sector, which has seen a significant fall in pension uptake.
“While reform is coming to the public sector, the private sector has already seen a seismic shift in its pensions. Over the past decade, many final salary deals have come off the table to be replaced with newer ‘money purchase’ pensions.
“Sadly, the fall in people saving into a final salary scheme has not been fully matched by interest in other types of pension. The weak economy and falling confidence in financial products have also spurred many private sector workers to quit pensions altogether.
“Upcoming reforms to automatically put all workers into a pension will be a huge help in tackling the UK’s savings crisis, especially in the private sector. The reforms could bring between five and nine million people into a pension, including younger people and many part-time workers.
“But more needs to be done. We must all work to provide pensions that people have the confidence to save in. This means rebuilding trust and confidence in the pension brand, and demonstrating what value people can achieve by saving in a pension.”