Workplace pension numbers dropped

Less than a quarter of people in their 20s were putting money into a private sector workplace pension before the Government's landmark retirement saving scheme was launched, analysis shows.

d3c88c28-75e0-11e3-8f00-0a0c0223000020140106T114113
By 2012, just 24 per cent of 22 to 29-year-olds were saving into a pension scheme, almost halving from 42 per cent 10 years earlier

Less than a quarter of people in their 20s were putting money into a private sector workplace pension before the Government's landmark retirement saving scheme was launched, analysis shows.

By 2012, just 24% of 22 to 29-year-olds were saving into such a scheme, almost halving from 42% 10 years earlier, according to figures from the Department for Work and Pensions.

The Government's scheme to automatically place people into workplace pensions started in October 2012 with larger firms and so far a higher than expected rate of nine in 10 employees are staying in rather than opting out.

Last month, it was confirmed that 2.2 million people had been placed into a workplace pension by their employers as the scheme rolls out over the next four years.

People aged over 22 and earning more than £9,440 are eligible to be placed into a pension by their employer under the initiative.

Recent research on 50 of the largest employers to automatically enrol their staff suggested that the younger generation in particular is embracing auto-enrolment, with a higher proportion of people under 30 staying in pensions than any other age group.

In a typical example the opt-out was highest for those nearing retirement in the 50-plus age group - at 15% - and lowest in the under-30s age group at 8%.

Pensions minister Steve Webb said: "Pension saving has fallen significantly in the past 10 years but we are turning the tide with automatic enrolment and young people are leading the way."