Workplace pensions saving by those in ‘elementary occupations’ has increased by over 50 per cent since the start of auto-enrolment, the Department for Work and Pensions has found.

According to the DWP’s Workplace Pension Participation and Savings Trends of Eligible Savers Official Statistics: 2006 to 2016 report, the largest increase in workplace pensions saving has been seen by those in ‘elementary occupations’, such as security guard, postal worker or cleaner. The level of savings in this group has increased from 20 per cent in 2012 to 71 per cent in 2016.

Overall, workplace pension participation remains highest in the professional occupations, with 86 per cent of eligible employees participating in 2016. This compares to 63 per cent of people in skilled trades (such as plumber, carpenter or welder) saving into a workplace pension in 2016. However, those in skilled trade occupations saw the largest increase in workplace pensions saving over the past year, increasing by 6 per cent between 2015 and 2016.

Young people saving has also seen a rapid rise since the start of auto-enrolment, with the number of eligible employees in the 22 to 29 age group saving into a workplace pension increasing from 24 per cent in 2012 to 68 per cent in 2016.

All other age groups have shown significant increases in saving over this period too. The second largest increase in workplace pension saving was those aged 30 to 39, which saw a 32 per cent increase between 2012 and 2016.

The report also found that the distribution, hotels and restaurants sector saw the biggest increase in pension saving since the start of auto-enrolment, from 27 per cent to 69 per cent between 2012-2016.

However the largest increase in workplace pensions saving over the past year was within agriculture and fishing, which saw an increase from 34 per cent to 45 per cent. Despite the increase, agriculture and farming was still the sector with the lowest level of workplace pension saving. In 2016, the sector with the highest levels of pensions saving participation was energy and water with 89 per cent of eligible employees participating.

Higher earners (those earning over £40,000) continue to have the highest participation levels, with 86 per cent of higher earners in the private sector saving into a workplace pension over the past year. However, the largest increase in pension participation levels (by 5 per cent) over the past year was in the £10,000 – under £20,000 earnings category.

An increase in participation can also be seen in the non-eligible for auto-enrolment group, rising from 16 per cent in 2012-13 to 25 per cent in 2015-16. The steady decline in the self -employed group saving into a pension, from 31 per cent in 2006-07 to 14 per cent in 2014-15, saw a slight reversal in 2015-16 with an increase to 16 per cent.

The highest level of private sector participation into workplace pension saving in 2016 was within the largest employer band (5,000 or more employees), with 89 per cent of eligible employees participating.

Staging for small and micro employers (SMEs) began in June 2015. For this group there was a 15 per cent increase in workplace pension saving between 2015 and 2016, with pension saving for those employed by micro employers increasing from 11 per cent to over 15 per cent over the past year.

Overall, 78 per cent of eligible employees are saving into a workplace pension, which is an increase of 3 per cent on 2015, the DWP’s report found.

It also stated that 77 per cent of eligible employees have saved into a workplace pension in at least three of the last four years, which is a fall of 2 percentage points since 2015.

The total amount saved into workplace pensions increased by £3.8 billion over the past year, to £87.1 billion saved for 2015-2016.

Commenting on the findings, Royal London director of policy and former Pensions Minister Steve Webb said: “Just five years ago in 2012, less than a third of eligible private sector workers was in a workplace pension. The fact that this proportion had risen to nearly three quarters by 2016 is extraordinary. When all firms have completed the process of automatic enrolment by the end of 2017/18, we could easily be talking about more than four in five private sector workers starting to save for their retirement.

“It is especially encouraging to see that the biggest growth has been among the under 30s, with coverage rising from around one quarter of twenty-somethings in a pension to roughly two thirds, albeit that the amounts being saved are still very low.

“These figures do however show the contrast between employees and the self-employed. Even with a slight improvement in 2016, pension scheme membership by the self-employed stands at just one in six. Urgent action to include the self-employed within a version of automatic enrolment cannot happen quickly enough.”

Hymans Robertson head of DC Lee Hollingworth also warned of a "missed opportunity" if the government doesn’t act now to engender higher saving rates.

"Auto-enrolment has been a commendable start but we need to go further," he warned. "Three-quarters of DC savers will not be able to retire on an adequate income. It should be a priority for the new government to commit to the schedule of increasing auto-enrolment contribution levels, as even lifting contributions to 8 per cent isn’t going to close the gap."

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