The number of employees who have signed up for a workplace pension has surpassed 8 million since the launch of automatic enrollment in 2012, according to the UK’s The Pension Regulator (TPR).
“Reaching this 8 million figure is a formidable achievement and represents a huge number of people on the path to a more financially secure retirement,” said Guy Opperman, minister for pensions and financial inclusion. “But we cannot be complacent, and as contribution rates rise, we know there is more to be done. That’s why our automatic enrollment review, which will report back later this year, is so vital to the future of this life-changing policy.”
The automatic enrollment policy was introduced to help the millions of workers who were not properly saving for retirement, as only one in three private sector workers were part of a workplace pension. The policy was set out in the Pensions Act 2008, which requires UK employers to automatically enroll certain members of their staff into a workplace pension plan, and contribute toward it. To be eligible for automatic enrollment, a worker must be at least 22 years old, but under state pension age, and working or ordinarily working in the UK with earnings of more than £10,000 ($12,900) a year.
Employers that don’t comply with the auto enrollment regulation may face fines, and those that comply late are expected to pay back any missed contributions to put employees in the position they would have been in if the employer had complied on time.
According to TPR, as of the end of June, there were 8,165,000 workers with a workplace pension as a direct result of automatic enrollment. In June, 168,000 people gained workplace pensions because of automatic enrollment, and 44,328 more UK employers reported that they had completed their workplace pension responsibilities, bringing that total number to more than 642,000.
“Tens of thousands more people every week are signing up to a new workplace pension through automatic enrollment,” said Darren Ryder, TPR’s director of automatic enrollment. However, he added that there are more than 500,000 more employers whose duties are still to begin during the coming months. “I would urge each and every one of them to check today that they know what they need to do and when they need to do it so they can seek our help if they need it.”