The number of employers that have met their auto-enrolment duties has passed the one million mark, a Pensions Regulator compliance update has confirmed.
TPR says 1,032,567 employers had complied with their auto-enrolment responsibilities by the end of January. These firms together have 28.9m employees of which 9.3m are eligible jobholders who have been enrolled into schemes. A further 10.9m employees were already members of schemes. TPR says 8.3m employees were not enrolled.
The compliance update also shows that 38,600 employers with collectively 19.9m employees have completed their re-declaration of compliance obligations. A further 549,000 employees have been re-enrolled.
TPR director of automatic enrolment Darren Ryder says: “I am delighted we have reached this important landmark, which shows how far we have come since the start of automatic enrolment.
“By successfully meeting their responsibilities, employers have helped reverse the downward trend in workplace saving so that putting earnings into a pension has now become the norm.
“The continued support of the pensions industry, including pension and payroll providers and business advisers has been crucial to the success of automatic enrolment. The industry has helped us ensure employers have the tools, information and services they need to comply with the law.
“We are now focused on the challenges ahead so that employers continue to understand what they need to do so that staff receive the pensions they are entitled to.”
Royal London director of policy Steve Webb says: “This is a huge milestone and everyone involved in making automatic enrolment work deserves huge credit. Getting more than nine million workers started on the journey of pension saving is a crucial first step, and a pause for celebration is in order. But now the real work starts. The step up in contributions in April 2018 and April 2019 has to be handled well and we urgently need a plan to get people beyond the 8 per cent minimum contribution planned under existing legislation. Getting so many people started with pensions is a tremendous achievement, but they risk being disappointed with the outcome if we do not get those savings levels up to more realistic levels as quickly as possible.”
Hargreaves Lansdown head of policy Tom McPhail says: “Auto-enrolment has been a remarkable achievement but there is still time for defeat to be snatched from the jaws of victory. Contribution rates are about to start rising, which means individuals need to be persuaded of the value and importance of staying in a pension and making the most of their employer’s contributions. Better engagement will also lead to better decision making in the run up to retirement.
“Alongside the reforms already announced by the government to extend the coverage and impact of auto-enrolment, we’d like to see members given the right to take ownership of their own retirement savings, rather than being forced into a new employer’s scheme every time they change jobs. This would cut down on the number of pensions people accumulate, increase engagement and would be particularly beneficial for multiple jobholders.”