The gulf between what public sector and private sector workers are saving into their pensions is widening, with Government employees now paying in twice as much as their industry counterparts, according to the latest data.
Department of Work and Pensions numbers show that while public sector contributions rose 8 per cent in 2016 to reach £8,418 on average, private savings stood at just 4,089, 38 per cent lower than their 2012 level.
Part of the dip has been attributed to automatic enrolment, which began its rollout in 2012.
Aviva head of saving and retirement Alistair McQueen tells the Financial Times: “Millions of workers have been brought into saving through this policy but the minimum contributions of 2 per cent (combined employee and employer) have led to many employers levelling down their contributions from previously higher levels.
“What has happened is that private sector employer contributions have been diluted by automatic enrolment whereas they have not been for 5m workers in the public sector.”
While separate DWP figures do show that auto-enrolment had successfully increased the total amount saved into pension pots in 2016 by around £3bn, Office for National Statistics figures continue to show a decline in individual private contribution rates.
Private sector contributions averaged 9.6 per cent in 2012, falling to 3.9 per cent in 2015.