Occupational defined contribution (DC) scheme membership has overtaken defined benefit (DB) participation for the first time.

Data from the Office for National Statistics (ONS) revealed that 35.7 per cent of employees saving into a workplace pension were in occupational DC schemes in 2019, compared to 34.6 per cent being in occupational DB schemes.

The overall employee pension membership rate also increased to its highest ever level, with 77 per cent participating in a workplace schemes compared to 47 per cent in 2012, when auto-enrolment began.

Membership amongst young employees (aged 22-29) increased from 31 per cent in 2012 to 80 per cent in 2019.

Aviva head of savings and retirement, Alistair McQueen said that the headline figures should not “convince us that our work is done”.

“While a record number are saving in pensions, millions are still saving at inadequate levels, and many are missing out altogether – either because they are too young, low earners or self-employed. Auto-enrolment must be celebrated for bringing many more people into pension saving but we mustn’t be complacent,” he added.

Despite the positives, the gender gap still remains, with 77 per cent of male employees having a workplace pension compared to 69 per cent of female workers.

Furthermore, there are still around 5 million employees not in workplace schemes, primarily due to those earning under £10,000 a year not having to be auto-enrolled, while 6.35 million were not receiving employer contributions to their pension.

The gap between part- and full-time workers also remained, with 58 per cent of part-time employees in a workplace pension compared to 86 per cent of those working full time.

TUC general secretary, Frances O’Grady, stated: “Automatic enrolment has helped many more working people get pension contributions from their employer.

“But the current rules exclude lots of low-paid and young workers. And that’s why so many people still don’t have a workplace pension.

“No more excuses – it’s time the government ended this injustice. Pension schemes are a vital part of earnings. There should be a pension contribution in every pay packet.”

In 2019, 78 per cent of employees with DC pensions contributed at least 3 per cent of their earnings, up from 37 per cent in 2018, following the increased minimum contribution rate in April 2019.

However, Royal London pension specialist warned that a “gaping chasm” remained between the level of contributions across DB and DC.

“We need to look urgently at how we can boost the level of DC contributions to ensure people get a decent retirement income,” she added.

AJ Bell senior analyst, Tom Selby, concluded: “Although the current government has other more pressing issues to address at the moment, not least the coronavirus outbreak, setting a course for the future of auto-enrolment and pension saving more generally is crucial to build on the early successes of the reforms.

“Given the importance of this point in time, a new Pensions Commission may be needed to guide genuine long-term retirement policymaking.”

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