Employee contributions to private sector defined contribution (DC) occupational pension schemes reached £3.2bn in the first quarter of 2026, up by around £600m year-on-year, according to the latest Office for National Statistics (ONS) data.

Employer contributions also increased, rising from £6.2bn in Q1 2025 to £6.8bn in Q1 2026.

Broadstone head of DC workplace savings, Damon Hopkins, said: “The continued growth in workplace pension saving is encouraging, with millions of employees now routinely putting money aside for retirement and employee contributions reaching £3.2bn in the first quarter alone.

“Employers are making an enormous financial contribution to later-life savings too, making it all the more important that businesses ensure this money is being used as effectively as possible, through well-designed pension provision, strong governance and meaningful employee engagement.”

Active membership of private sector DC schemes also edged higher, increasing by around 30,000 over the year to 11.5 million.

At the same time, deferred membership increased from 22.1 million in Q1 2025 to 22.9 million in Q1 2026, a rise of more than three-quarters of a million.

Hopkins said the increase reflected a more mobile workforce, with employees building up multiple pension pots as they move between jobs.

“The continued rise in deferred membership also reflects an increasingly mobile workforce, with employees accumulating pension pots as they move between jobs,” he continued.

“Consolidation and pensions dashboards should make those savings easier to manage, but the wider challenge is ensuring workers remain engaged with their pension throughout their careers.”

The ONS data also showed that private sector DC pension scheme assets increased by £16bn, or 4 per cent, between 30 September 2025 and 31 March 2026, driven largely by a £17bn increase in the value of direct investments.

Meanwhile, total benefits paid by private sector DC schemes reached £1.2bn in Q1 2026, up from £0.4bn at the beginning of the ONS time series in September 2019.

Lump-sum benefits averaged £0.99bn per quarter between Q3 2024 and Q1 2026, the highest average recorded over the series.

Hopkins argued the figures highlighted the distinction between pension participation and adequacy, warning that many workers may still not be saving enough to achieve their expected standard of living in retirement.

“Auto-enrolment has transformed pension participation, but participation and adequacy are not the same thing.

“For many workers, particularly those on lower or middle incomes, the more important question is whether the amounts being saved today will ultimately provide the standard of living they expect in retirement.”

He added that employers had an opportunity to go beyond minimum contribution requirements by helping employees understand what was being paid into their pension, what this could mean for their eventual retirement income and whether they may need to save more.

“As attention increasingly turns from pension participation towards pension adequacy, employers that communicate effectively and encourage employees to engage with their long-term savings can play an important part in helping improve retirement outcomes,” Hopkins concluded.

---