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ONS reveals 400,000 drop in pension scheme membership

The number of people paying into a workplace pension scheme dropped 400,000 last year, from 8.2 million in 2011 to 7.8 million in 2012, as the Government’s automatic enrolment reforms were rolled out for the UK’s largest employers.

Auto-enrolment began in October last year, requiring all employers to offer a workplace pension to their employees. The reforms are designed to address a steady decline in private sector pension scheme membership.

The Office for National Statistics annual occupational pension schemes survey, published last week, reveals a small drop in overall pension scheme membership during 2012.

However, the 2012 figure is 36 per cent lower than the peak in 1967, when there were 12.2 million members of public and private sector workplace pension schemes.

Some 5.1 million of the active pension scheme members in 2012 worked in the public sector, down from 5.3 million in 2011.

The remaining 2.7 million were in private sector pension arrangements, compared with 2.9 million in 2011.

Barnett Waddingham consultant Malcolm McLean says: “The gap between pension provision in the public and the private sector remains disappointingly large and illustrates the need for boosting scheme membership in the latter, which auto-enrolment will hopefully help to achieve in terms of the numbers contributing, if not necessarily in the level of contributions being paid in.”

In the private sector, the number of active defined contribution scheme members increased from 900,000 in 2011 to 1 million in 2012. Defined benefit scheme membership, on the other hand, dropped from 1.9 million to 1.7 million.

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