The industry has been told not to get carried away with “the small successes of auto-enrolment” and instead focus on “the work that still needs to be done”.

More than eight million people have been auto-enrolled into a workplace pension since the policy was introduced in 2012 but Wealth at Work director Jonathan Watts-Lay believes the long-term success of the current workplace pension regime relies on the provision of financial education and guidance to persuade individuals of the merits of saving more for their retirement.

“It’s easy to get carried away with the small successes of auto-enrolment, rather than focus on the work that still needs to be done to encourage individuals to save more for their retirement. The minimum contribution rate for defined contribution pension schemes, personal pension schemes and some hybrid schemes is being phased in over time and will increase from a minimum of 2 per cent overall (with at least 1 per cent from the employer) to a minimum of 5 per cent overall (with at least 2 per cent from the employer) in April 2018.

"Minimum contribution rates will increase again in April 2019 to a minimum of 8 per cent total (with at least 3 per cent from employers). But this is far below the contribution levels required by many individuals to enjoy a comfortable retirement.”

Research by the company found, only one in 10 (10 per cent) UK employers believe that their employees are saving enough for their retirement. Watts-Lay stated that there is “still a long way to go until we are at a stage where the majority of employees are producing adequate savings for financial security at-retirement”.

“Retirement might seem a long way off for many, but individuals really need to think about how they are going to fund their future income as early as possible, to get a better understanding of what they need to be doing now. Saving more now or working longer than planned could make a real difference to retirement income and the value of well thought out planning from early on should not be underestimated."

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