The Money Stats – December 2018 – Strong Auto-Enrolment Pension Rates Yet To Solve UK Coverage Shortfall

Costs going up

While much positive progress has been made on UK public awareness of pensions, and participation in them, a considerable shortfall remains in overall coverage, according to the December 2018 Money Statistics, produced by The Money Charity.

The implementation and take-up of automatic enrolment has been a real success across the UK since its introduction, with 9.96 million employees enrolled in schemes by the end of November 2018. However, these developments must be measured against a comparable gap of 9.2 million employees not yet belonging to a scheme. In 2016-17, the most recent year for which full data is available and when many businesses were still adjusting to auto-enrolment, around 55% of working age adults (comprising employers, employed and self-employed) were not yet in a pension scheme.

A further challenge arises in this area in that, for those who are in pension schemes, the contribution rate is often too low to provide a potential income in retirement which could typically be considered as adequate. According to The Pensions Policy Institute, estimates of what kind of combined contribution rate (calculated as the employer and employee’s contributions plus tax relief) will deliver a higher probability of this ‘adequate’ income vary anywhere between 14-27% of total salary. However, only 20.9% of private sector employees were receiving an employer contribution to their workplace pension greater than 8% of their total salary. Defined Benefit schemes (i.e. pensions based on final salary or career average) often have contribution rates above 20%.

These challenges coincide with the Department for Work and Pensions consulting on the project to build a “Pensions Dashboard”, a web portal that will enable people to see details of all their pensions in one place. Because of the fragmented state of the UK’s pension system (there are 40,000 different pension schemes operating), many people often have multiple small pension pots, some of which get lost as they move jobs and addresses. By linking up all pension schemes through a central portal, the Pensions Dashboard aims to help people locate all their pensions, add up their combined retirement income, and plan better for the future.

Michelle Highman, Chief Executive of The Money Charity says:

“If we’re honest, none of us spend as much time planning for our futures as we should, but there’s a clear problem in working hard and being comfortable now if we’ll then leave ourselves in trouble later in life. Those are the years when the majority of us will hope to be most comfortable, as well as when we may most need help.

“That’s why the successes of auto-enrolment and the plans for the Pensions Dashboard are to be wholeheartedly welcomed, with strong crossover with our message of financial capability. However, clearly there is still much to be done, ensuring people do not fall through the gaps in pensions provision, as well as engaging people with being financially capable in planning for all times and circumstances of life.”


Other key points from the December Money Statistics: 

  • The number of people unemployed fell by 134 per day in the year to October 2018.
  • Net lending to individuals and housing associations in the UK grew by £240 million a day in October 2018.
  • Borrowers paid £140 million a day in interest in October 2018.

Get the full picture and many more fascinating facts about money in the UK in our monthly Money Statistics.


Notes to Editors

  • The Money Charity is the UK’s financial capability charity. We believe that being on top of your money means you are more in control of your life, your finances and your debts, reducing stress and hardship, and that being on top of your money increases your wellbeing, helps you achieve your goals and live a happier more positive life as a result. Our vision is for everyone to be on top of their money as a part of everyday life. We empower people across the UK to build the skills, knowledge, attitudes and behaviours, to make the most of their money throughout their lives. Find out more at
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