Extra 600,000 saving into workplace pension

Workplace pension participation among eligible employees reached 90% in 2025, although new-saver opt-out rates rose amid continued pressure on household finances.

Department for Work and Pensions figures showed 22.6 million eligible employees were saving into a workplace pension, an increase of 600,000 on the previous year.

Across the wider workforce, including people who did not meet the automatic enrolment criteria, 24.2 million employees were saving into a pension.

This represented 82% of all employees and was also 600,000 higher than in 2024.

The DWP said the growth partly reflected more employees becoming eligible for automatic enrolment as rising salaries took them above the £10,000 earnings trigger, which has remained frozen in recent years.

Rathbones financial planning divisional lead Rebecca Williams said: “The fact that around nine in 10 eligible employees are now saving into a workplace pension is a significant achievement.

“With employers accounting for more than 60% of workplace pension saving, automatic enrolment continues to play a vital role in improving long-term financial security.”

Total annual workplace pension saving among eligible employees reached £166.1bn in 2025, representing a real-terms increase of £63.5bn since automatic enrolment was introduced in 2012.

Employers accounted for 61% of the amount saved, while employee contributions made up 27% and tax relief accounted for the remaining 12%.

The DWP cautioned that recent annual comparisons should be treated carefully because of changes to the way the savings data was validated and cleaned.

Despite the overall increase, participation remained significantly lower among some groups.

Staff aren’t confident making decisions about workplace pensions

Only 55% of eligible private-sector employees working for businesses with fewer than five staff were saving into a workplace pension. The rate among eligible Pakistani and Bangladeshi employees was 67%.

Participation also increased sharply around the £10,000 earnings trigger, suggesting that relatively few lower-paid employees voluntarily joined a scheme before becoming eligible for automatic enrolment.

PensionBee head of pensions Becky O’Connor said: “The difference in participation before and after the £10,000 trigger indicates that voluntary enrolment for lower earners is unusual and shines a spotlight on whether reducing or removing the trigger could be a policy focus for boosting retirement outcomes among lower earners, or those that work across multiple jobs.”

The proportion of people who had recently started saving and then actively opted out also increased to around 11% to 12%.

The DWP said the measure had been volatile in recent years, potentially reflecting the pandemic and periods of higher living costs, although opt-outs and people stopping contributions remained low as a proportion of all eligible employees.

Broadstone director David Pye said the increase was worth monitoring because it could indicate that employees were prioritising immediate financial pressures over their future income.

He added: “Pension accumulation is now firmly established as a normal part of working life. However, participation alone does not guarantee an adequate retirement income.”

Williams agreed that the focus now needed to shift from participation to contribution levels.

She said: “Getting people into pensions was only the first step. The bigger challenge is ensuring they are saving enough to achieve the retirement they want.”

The figures also highlighted the continuing shift from defined benefit to defined contribution pensions.

Among people accessing a private pension for the first time, the proportion receiving a lump sum or another defined contribution product rose from 37%, or 280,000 people, in 2016/17 to 49%, or 410,000 people, in 2025/26.

However, 94% of the 12.9 million people already receiving private pension payments still received income from a defined benefit scheme or an annuity.

O’Connor said the shift would change how future retirees accessed their income and could leave more people requiring help to manage their pension savings.

Pye called for the next stage of pension policy to address adequacy by examining contribution increases, extending saving to more lower-paid and younger workers and finding ways to bring the self-employed into pension saving.