Workplace pension scheme member levels hit record highs, but experts warn enough still not being done to prepare for retirement

Hayley Kirton
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More of us may have a pension, but we're still not putting enough into them (Source: Getty)

The number of people with a workplace pension has soared to its highest level yet, but pensions experts have warned people still are not doing enough to get ready for their golden years.

According to figures released from the Office for National Statistics (ONS) today, total membership of occupational pension schemes in the UK rose to 33.5m in 2015, up 10 per cent compared with 2014's 30.4m.

However, at four per cent, the level of contribution from private sector members in 2015 has stayed roughly the same as the year before, something which former pensions minister Steve Webb warns needs to change.

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"The record levels of workplace pension membership in 2015 are hugely encouraging, and the continuation of automatic enrolment since then means that the numbers will continue to surge," said Webb, who is now director of policy at Royal London. "But the sting in the tail is the very low rates of contribution into many of these pension plans."

Webb warned that a contribution level of three or four times the current rate is likely to be needed to make sure workers have a comfortable retirement.

Tom McPhail, head of retirement policy at Hargreaves Lansdown, also took issue with the low level of contributions, but added raising these "will inevitably cause financial pressures on both employers and employees at a time when they are trying to contend with spending constraints, and the uncertainty of Brexit".

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Meanwhile, Kate Smith, head of pensions at Aegon, cautioned: "Topping up private pensions, monitoring their performance, and adjusting contributions, will be vital if the next generation of retirees are to reach their retirement goals."

To say the pension industry has gone through some changes in recent years would be putting it lightly.

Auto-enrolment, whereby employees need to opt out of their workplace scheme rather than opting in, started rolling out in 2012. The Pensions Regulator revealed earlier this year that 6m more people were now paying into a pension as a result of the initiative.

Meanwhile, in April last year, the pension freedom rules came into force, which essentially allow those aged 55 or over to access their pension pot without first purchasing an annuity.