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Retirement

Auto-enrolment a boon for traditionally pension-less professions

Lucinda Beeman
Written By:
Lucinda Beeman
Posted:
Updated:
06/05/2014

Sectors without a history of providing pensions are seeing increases in the number of workers saving for retirement, figures have revealed.

Nearly a million new savers have joined defined contribution schemes since 2011, according to to the Office for National Statistics (ONS).

Sales and customer service workers – including cashiers, sales assistants and supervisors – and those in elementary occupations like security guards, cleaners and dinner ladies had the largest numbers of new savers.

Pensions Minister Steve Webb said: “For the first time, thousands of hardworking people with jobs or businesses that have not traditionally provided pensions can start saving with a contribution from their employer, helping them towards a more prosperous future and restoring fairness in retirement.”

The ONS expects nine million people to save for the first time or save more thanks to automatic enrolment, which requires employers to automatically enrol staff aged over 22 and earning over £9,440 into a qualifying workplace pension scheme. Employees can choose to opt out.

Automatic enrolment, which began with large employers in October 2012, will be complete by 2018.

According to the latest ONS Annual Survey of Hours and Earnings pension tables, workplace saving increased in 2013 for the first time since 2006.

The sales and customer service sector saw an increase of eight per cent, while the number of savers in elementary occupations grew by five per cent. 

An increase of almost one per cent in caring, leisure and other occupations means 20,000 more caretakers, childcare assistants, travel agents and the like are now saving retirement.

Webb continued: “The tide is turning for pension saving in Britain after decades of decline. Automatic enrolment is putting pension saving within reach of all workers, whatever job they have, including many on low to middle incomes.”

Occupations where pension saving is already well-established also saw increases. The percentage of managers, directors and senior officials saving increased from 31 per cent to 35 per cent, while the percentage of savers in professional jobs rose from 17 per cent to 19 per cent.

Despite these gains, the ONS calculates that 13 million people are currently undersaving for retirement.