Automatic enrolment (AE) is a great success story with more than 9.6 million workers enrolled into pensions saving and over 1.2 million employers meeting their duties. It was created to help people with their long-term pension savings and works by requiring employers to enrol all eligible staff into a workplace pension. This policy has helped to reverse a decade of decline in savings prior to AE. An estimated 10 million people will be newly saving or saving more later this year and less than 10% of people have opted-out of their workplace pension.
In Hendon constituency, approximately 14,000 eligible jobholders have been automatically enrolled and 2,470 employers have met their duties.
We do not hold constituency level data for the number of women automatically enrolled. AE is helping those who were historically disadvantaged in terms of occupational pension provision to build up their retirement savings, and they are often women and lower earners. Since the introduction of AE the proportion of women employed full-time in the private sector without a workplace pension has decreased from 65 per cent in 2012 to 31 per cent in 2016. It is also equalising the rate of workplace pension participation among eligible men and women. In 2016, 73 per cent of eligible men and women in the private sector were saving into a workplace pension compared with 43 per cent and 40 per cent of eligible men and women respectively in the private sector in 2012.
The Government’s 2017 review of AE report - Maintaining the Momentum - sets out our ambition for strengthening the framework of workplace pension saving for lower paid workers (many of whom are women working part-time). Over the coming year we will work to build a renewed consensus to deliver the detailed design and implementation of our proposals.
That includes working to deliver the Government’s manifesto commitment to improve pension participation and retirement outcomes amongst self-employed people.
The self-employed represent a highly diverse group of around 15 per cent of the workforce amongst whom pension coverage varies significantly. The AE review report recognised that while a significant proportion of the 4.8m self-employed individuals in the UK have good levels of saving and preparation for later life, there are significant numbers of self-employed people who are under saving, or at risk of under saving for retirement.
We are investigating the most effective ways to address this, learning from the principles and successful roll-out of automatic enrolment to appropriately target interventions and understand what works, and we are utilising pensions’ industry expertise. DWP and HMT held a recent innovation event with the Association of British Insurers (ABI), exploring how technology and existing financial products could be part of the solution to enabling self-employed people to build retirement savings for their later life.
Government will test and develop targeted interventions for the self-employed, starting later this year, before setting out our proposals to implement workable solutions at scale.