A considerable gap remains between public and private sector employer and employee contribution levels, according to data from the Office of National Statistics (ONS).
The figures revealed private sector employee contribution levels had fallen across the board between 2014 and 2015. The one exception was the zero to under 4% employee contribution rate which had risen in the private sector from 32.9% to 40.4%.
The number of employees in the public sector making a contribution of 7% or more of their pensionable earnings had remained static at 47%.
However, the number of employees in the private sector making a contribution of 7% or more had dropped from 11.4% in 2014 to 9.8% in 2015.
There was also a rise in the number of private sector employees receiving less than 8% of an employer contribution rate into their workplace pensions from 68.4% in 2014 to 76% in 2015.
In contrast, more than 92% of employees received a rate of over 12%, down from 93% in 2014. For more than half (51.9%) of private employees the employer contribution was between zero and 4%, a rise from 45% in 2014.
This employer contribution rate was two-thirds lower than the public sector in 2015.
The ONS also found that private sector pension scheme membership had risen from 49% in 2014 to 55% in 2015. Some 87% of employees in the public sector had a workplace pension in 2015.
The overall number of employees belonging to a workplace pension rose to 64%, the highest percentage since the series began in 1997 when 55% of both groups belonged to a workplace scheme.
Prior to the implementation of workplace pension reforms in 2012, 47% of private and public sector employees belonged to a workplace pension scheme.
The overall increase in workplace pension membership between 2014 and 2015 was driven by increases in occupational defined contribution (DC) and group personal pension schemes in the private sector, according to the ONS.
The survey found occupational defined benefit (DB) pension schemes continued to decline, representing less than half (45%) of total workplace pension membership in 2015, down from a high of 83% in 1997.
Royal London pensions development manager Jamie Clark said: “It is vitally important for members of workplace pensions to understand that to secure a decent income in retirement they potentially need to make contributions at a much higher level than they currently do.
“They need to regularly review the amount that they are contributing, otherwise the income they are able to secure is likely to be not enough for the lifestyle they hoped and they may well need to continue to work much longer than anticipated.”
Barnett Waddingham senior consultant Malcolm McLean said: “It is very encouraging to note that whereas pension membership has increased in most age groups in 2015 compared with 2014, the largest increase (seven percentage points, to 61%) is in the age group 22 to 29. Getting younger people engaged with pensions has long been a problem and we now appear to be seeing signs of some progress in this area.
“The next big challenge is to encourage by whatever means greater levels of contributions so as to ensure more meaningful pension provision results. At this point in time the minimum 8% contribution level specified for auto-enrolment is clearly inadequate and needs to increase.”
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