One million employers have enrolled their staff into a workplace pension, enabling over nine million employees to save for their retirement, it has been confirmed.
According to figures from The Pensions Regulator, published today, 13 February 2018, in the final stages of the policy launch, over 600,000 employers have complied with their duties in the past year alone.
A further 150,000 small employers are due to enrol their staff by June this year.
Since its commencement in 2012, the government's auto-enrolment policy has required businesses to gradually enrol their staff into workplace pensions, starting with the UK's largest employers to the smallest ones today.
Contribution rates are set to increase to 5 per cent in April 2018 and 8 per cent in April 2019.
Later this year it is expected that up to 10 million people will be either newly saving or saving more into a workplace pension through auto-enrolment.
TPR director of auto-enrolment Darren Ryder said: “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.”
Minister for Pensions and Financial Inclusion Guy Opperman commented: "With one million employers – from the small sandwich shop owner to the large supermarket chain – now enrolling their staff into a workplace pension, we are creating a nation of responsible employers who are reassuring their workforce that with their support, they will have a secure retirement.
"Clearly this would not have been possible without the hard work and continued support of employers across the UK. That is why we are committed to working closely with them to prepare for our recently announced proposals which will ensure even more people, including 18 to 21 year olds, lower earners and multiple job holders, can benefit from a workplace pension in the future."
Research by the Department for Work and Pensions last year found that small and micro employers have embraced their auto-enrolment duties, noting the policy is “necessary”, “sensible”, and “easier to implement than first expected”.
Of the employers who participated in the study, 82 per cent had no workers who had opted out and among those who did have workers opt out, 75 per cent had just one opt-one.
Commenting on the one-million employer mark, Hargreaves Lansdown head of policy Tom McPhail said: “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."
Royal London director of policy Steve Webb added: "This is a huge milestone and everyone involved... 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."