Stuart Price, Partner and actuary at Quantum, gives his thoughts on the latest figures from the Office for National Statistics (ONS) revealing that a record number of people in the UK are now saving for retirement…
Stuart said: The huge upsurge in pension members is largely a result of the auto enrolment regime established by the government in 2012. The current system sees those aged between 22 and state retirement age and earning more than £10,000 pay a minimum 1 per cent of their earnings into a pension scheme, while their employer also contributes 1 per cent.
From April 2018 this will increase to 3 per cent from the employee and 2 per cent from the employer and the following year this will grow to 5 per cent and 3 per cent respectively.
Although the latest ONS figures have shown a significant increase in those now signed up to an occupational pension scheme, the obvious worry is that when the minimum contribution levels increase, so too will the number of people opting out of the scheme. The survey results next year and the following year will make interesting reading.
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