The number of eligible employees participating in a workplace pension remained stable year-on-year in 2020 at 88%, equal to around 19.4 million savers, the latest government figures have shown. Additionally, the data revealed that the total annual savings for eligible savers had risen to £105.9bn in 2020, an increase of £5.5bn from 2019. The public sector saw a £5.7bn increase in the amount saved to £47.1bn, while the private sector recording a £0.2bn fall to £58.9bn. Employee pension contribution rates in Real Time Information (RTI) remained relatively stable throughout the 2020/21 financial year, despite the impact of the Covid-19 pandemic. In addition to this, automatic enrolment scheme participation increased from 49% in 2012/13 to 75% of employees in the 2019/20 financial year. The figures also showed that, since 2012, a number of participation gaps have narrowed, with the largest increases seen in agriculture, fishing and distribution, hotel and restaurant industries, and small employers. All industries in the private sector recorded participation rates of 79% or above. In addition to this, the “persistent” gap in participation between age groups has narrowed from a 26% point gap in 2012 to a 4% point gap in 2020, as participation amongst the 22 to 29 age group increased from 24% to 84% over the same period. There was a fear that the financial pressures caused by the pandemic and subsequent lockdown would blow a hole in people’s retirement plans. Despite the uncertainty facing millions of savers in 2020/21 the majority have stuck with their workplace pension, benefitting from both upfront tax relief and matched employer contributions in the process.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of September 2021 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.