Official Statistics

Workplace pension participation and savings trends statistics: Background information and methodology

Published 28 June 2022

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This publication is available at https://www.gov.uk/government/statistics/workplace-pension-participation-and-savings-trends-2009-to-2021/workplace-pension-participation-and-savings-trends-statistics-background-information-and-methodology

Context of the statistics

Automatic enrolment (AE) was introduced in 2012 to help address the decline in private pension saving and to make long-term saving the norm. It aims to increase workplace pension saving in the UK and forms part of a wider set of pension reforms designed to enable individuals to achieve financial security in retirement.

Eligibility of AE

AE mandates employers to provide a workplace pension for all workers meeting all of the following criteria: earning more than £10,000 a year; are aged between 22 years and State Pension age (SPa) and are not already enrolled in a qualifying workplace pension.

Note that throughout this report eligible employees are defined as employees who meet the AE age and earnings criteria each year, this includes employees already a member of a workplace pension scheme when AE was introduced.

Rollout of AE

AE commenced in 2012 and full implementation was completed in 2019. AE duties were brought in gradually over this time for employers, based on their size, and there was a phased increase of minimum contribution rates.

Staged implementation: The AE duties were staged in between October 2012 and February 2018 by employer size, starting in October 2012 with the largest employers based on PAYE scheme size, to the smallest in 2017. New PAYE schemes between April 2012 and September 2017 were staged last, between October 2017 and February 2018. New PAYE schemes from October 2017 have immediate AE duties.

Phasing: AE regulations require minimum contribution rates from the employer and in total (i.e. employer’s contributions, worker’s contributions and tax relief). Before 5th April 2018 these minimums were 2 per cent of the worker’s qualifying earnings of which the employer must contribute at least 1 per cent of earnings. Between 6th April 2018 and 5th April 2019, this rose to 5 per cent total including at least 2 per cent from employers, and on 6th April 2019 these rates rose again to a total of 8 per cent including at least 3 per cent from employers. The employee usually receives income tax relief on their contribution, usually at their marginal tax rate.

Minimum contributions based on qualifying earnings

Employer 3%
Employee 4%
Tax relief 1%
Total 8%

Purpose of the statistics

These are annual official statistics, first published in 2014.

The publication’s original aim was to complement the Automatic Enrolments Evaluation Report by providing more detailed breakdowns of two key measures for evaluating the progress of AE implementation:

  • increasing the number of savers, by monitoring trends in workplace pension participation
  • increasing the amount of savings, by monitoring trends in workplace pension saving

Up to and including the 2019 publication, the publication provided annual statistics from 2009 on:

  • Workplace pension participation, with breakdowns by:
    • sector (private/public)
      • employer size
      • earnings
      • age
      • gender
      • working pattern
      • industry
      • occupation
      • region
    • economic status (including eligible, non-eligible and self-employed)
    • disability
    • ethnicity
  • Amount of savings: total annual savings for eligible employers by sector, broken down by employers contributions, employee contributions and tax relief

Statistics from 2003 to 2008 are available in previous publications.

The roll-out of AE was completed following implementation of the contribution increase in April 2019. To reflect user needs resulting from both this changed context and the Coronavirus (COVID-19) pandemic, publications from 2020 onwards have been extended.

The purpose of the 2020 publication was to:

Publications from 2020 onwards will include all analyses detailed above, as well as:

  • annual statistics from 2009 to 2021 inclusive on:
    • contributions
    • savings
  • monthly statistics on:
    • stopping saving
    • participation and Employee Pension Contributions

These statistics are available on an annual basis both as a statistical first release, a document that provides a summary of key statistics and findings, and data tables, which provide full breakdowns of these statistics along with sample sizes.

Uses of the statistics

The statistics have a variety of uses including to:

  • monitor the key measures of AE of workplace pension participation and amount of savings
  • inform policy analysis and policy development
  • answer Parliamentary Questions and Freedom of Information requests
  • inform briefing and submissions
  • inform departmental costings
  • allow external users (for example the pensions industry, academic institutions, research organisations, media, members of the public)

Sources of the statistics

The statistics in this publication come from different data sources.

Annual Survey of Hours and Earnings (ASHE)

ASHE is conducted by the Office for National Statistics (ONS) and is a key source of information on workplace pensions in GB as it collects information on all types of workplace pension: occupational pension schemes, group personal pensions and group stakeholder pensions.

The survey results are used widely in order to analyse pension participation and to monitor the impacts of pension reforms.

Read the background information on this data source in the Annual Survey of Hours and Earnings (ASHE) methodology and guidance

DWP Family Resources Survey (FRS)

The FRS is sponsored by the Department for Work and Pensions (DWP). The survey collects information on the income and circumstances of individuals living in a representative sample of private households in the United Kingdom.
The primary objective of the FRS is to provide DWP with information to inform the development, monitoring and evaluation of social welfare policy.

Detailed information is collected on respondents’ income from all sources including benefits, tax credits and pensions; housing tenure; caring needs and responsibilities; disability; expenditure on housing; education; childcare; family circumstances; child maintenance.

HMRC Real Time Information (RTI)

RTI is Her Majesty’s Revenue and Customs (HMRC’s) reporting system for income taxed via Pay As You Earn (PAYE). Employers and pension providers are required to report to HMRC payments to employees, or recipients of occupational pensions, on or before each payment date where it is practical to do so. Within RTI, submissions relate to a payment to an employee, or occupational pension recipient. When they are submitted to HMRC by the PAYE scheme, they are contained within a Full Payment Submission (FPS). RTI includes information about the PAYE scheme, the employee (or occupational pension recipient), and the payment.

RTI only holds information on employments and pensions that are reported through the payroll reporting process. RTI is not designed to and does not include information about Self-Employment or pensions which are not paid via PAYE, such as State Pension and income from other sources that is seen as pension income by the individual.

A PAYE scheme is not required for an employer if all of their employments are paid less than the Lower Earnings Limit of £123 per week or £533 per month (as of 2022/23). If any single employee earns more than this, is in receipt of a pension, has another job, or receives expenses or benefits from the employer, the employer is required to report RTI for all employees. Some employers are also exempt from online payroll reporting, and therefore do not need to submit RTI electronically. This may be due to religious beliefs, where care services must be provided to the employer or a member of their family, or other reasons.

The published data using RTI is structured around two separate sets of data that are both derived from the PAYE schemes listed on RTI. These are:

  • Monitoring of Stopping Saving
  • Monitoring of eligible jobholders making contributions and employee pension contribution rates

Monitoring of Stopping Saving

The aim of this analysis is to identify the number of employments that have stopped paying pension contributions in each tax month. This is an update to stopping saving metrics previously published in the Automatic Enrolment Evaluation Report 2019.

The methodology has three steps:

  1. Identify spells of pension saving.

  2. Classify whether an employee has stopped pension saving in a particular month, and if yes the reason for stopping.

  3. Break down the analysis with several classification variables.

This analysis was produced on a five tax month rolling period, referred to as the interest period. To estimate stoppages in a particular month, this interest period covers that month and the four following tax months. To calculate the number stopping saving for October 2016 for example, the interest period would include the months from October 2016 to February 2017.

To identify whether someone who was pension saving in the first month of the interest period through a particular employment stopped or continued saving, we look at their payment records in the interest period. The payment records in the last four months of the interest period will determine if we identify the employment as stopping pension saving in the first month of the interest period or if they continued to pension save. For example, if an employee who was saving in October did not make any pension contributions on any of their subsequent payments in November to February through that employment, we classify them as having stopped pension saving into that employment’s pension scheme in October.

The stopping saving rate for each month is calculated using this methodology, looking at the subsequent four months of payment records to identify whether an employee has stopped pension saving into that employment’s pension scheme in that month. As outlined in the limitations, it is possible that the employee may still be receiving employer pension contributions.

To identify spells of pension saving, we identify records that had employee pension contributions. If, on any payment date in a tax month, an employment was found to have employee pension contributions greater than £0 exactly, they were classed as paying employee pension contributions.

All records for an employment in the last 17 complete tax months at the point of analysis, including the interest period, were analysed to find spells of pension saving. This then identified tax months when the employment was making employee pension contributions. Of those identified as pension saving, only employments with employee pension contributions in the interest period were included in the analysis.

The volume of employments with employee pension contributions in each tax month of the interest period were calculated. This figure is used to estimate the level of participation in workplace pension saving per month. Of the most recent spell of pension saving, the last payment with employee pension contributions was identified.

Once the most recent employee pension contribution has been identified, we identify whether an employee has been classed as having stopped their pension saving. By looking at patterns of pay and employee pension contributions, we can infer pension savings behaviour within an employment and the reasons for it.

We consider an employee as having stopped saving in the following circumstances:

End of employment When the employment is not paid in at least the last 90 days of the five-month interest period, this employment is identified as ended and thus there are no further pension contributions.
Becoming non-eligible This is when an employment becomes no longer eligible for AE on the next payment after their final pension contribution. These employments must have been eligible at the point of the final employee pension contribution. An employment can become non-eligible due to changes in age or earnings.
Active decision If an employment is still active and eligible, but stops contributing into a workplace pension, we classify this as an active decision to stop saving.

If the employee died within a close proximity to the last pension contribution (up to and including 29 days before or up to and including 59 days after the final employee pension contribution), the stoppage was classed as deceased. These employments are not included in the three categories above.

If the employment was paid in the last 42 days of the interest period and had up to and including 35 days between the last employee pension contribution and the last payment for the employment, the employment was classed as still being active and saving (i.e. it does not fit in any of the three above categories nor has the employee been identified as deceased).

Monitoring of eligible jobholders making contributions and employee pension contribution rates

The aim of this analysis is to monitor counts of employments with any employee contributions on a monthly basis.

In both the participation and contributions analysis, only employments that are earnings eligible are included.

Employee pension contribution rates are calculated using taxable pay and the employee pension contribution amounts submitted on RTI. The following process describes HMRC’s calculation of the employee contribution rates used in the RTI analysis. Taxable pay and pension contributions are summed by tax month for each employment to get the total pay and total contributions for each tax month. Pension contributions made under relief at source (RAS) arrangements are uplifted by 25% to reflect tax relief at the basic rate (80% of the pension contribution will be reported in RTI as 20% is reclaimed by the pension provider). Pay and contributions are then converted to daily amounts by dividing the amount by the number of days between the last payments in the tax month being analysed and the previous tax month.

The pension contribution rate is calculated by dividing the derived daily pension contribution amount by the derived daily taxable pay. This is done separately for net pay and relief at source pension contributions. This is also done for pay between the AE thresholds, where the annual lower and upper earnings limits are converted to daily and the taxable pay between these amounts are used. The differences between net pay rates and relief at source rates are used to determine if the contribution rates need to be recalculated using either method.

Definitions and terminology within the statistics

Annual Survey of Hours and Earnings (ASHE)

Eligible employee To define an eligible employee the data is restricted to capture employees who meet the AE age and earnings criteria (age at least 22 and below SPa and earning above the AE earnings threshold each year, currently £10,000). This includes employees already a member of a workplace pension scheme when AE was introduced.
Eligible saver An eligible saver is an eligible employee who is saving into a workplace pension.

HMRC Real Time Information (RTI)

Earnings eligible In both the participation and contributions analysis, only employments that are earnings eligible are included. If an employment is listed relating to an individual between the age of 22 and state pension age, and has an annual income greater than £10,000 (daily taxable pay greater than £27.40) at the last payment date in the tax month, then the employment is classed as earnings eligible.
Eligible Jobholder rate The eligible jobholder rate included within the participation section is calculated using the total counts of both contributing jobholders and total jobholders who strictly meet the eligibility criteria described above.

Comparisons between the statistics

Both the ONS and DWP publish statistics on pension participation, contributions and trends over the Covid-19 period.

1. ONS Employee Workplace Pensions in the UK

This publication included statistics on the participation in 2021 of all employees, using the same data sourced used in this publication for eligible employees. The latest version of this publication covers 2021 provisional and 2020 final results.

In April 2021, 79% of UK employees had a workplace pension, compared to less than half of UK employees when AE was introduced in 2012.

2. ONS Funded occupational pension schemes in the UK

This publication included statistics of employee pension contributions from the Financial Survey of Pension Schemes. The latest version of this publication covers October to December 2021.

A fall in total employee contributions was observed between Q1 (Jan to Mar) and Q2 (Apr to Jun) 2021, followed by a subsequent recovery in Q3 (Jul to Sep) 2021. Between Q3 (Jul to Sep) and Q4 (Oct to Dec) 2021 recovery continued, with employee pension contributions increasing in private sector DC schemes.

3. ONS Pension Wealth in Great Britain

This publication included trends in active private pension wealth from the Wealth and Assets Survey. The latest version of this publication covers April 2018 to March 2020.

There has been a 14 percentage point increase in active private pension participation between July 2010 to June 2012 and April 2018 to March 2020.

4. DWP Family Resource Survey

This publication included statistics on pension participation for working-age adults. The latest version of this publication covers financial year 2020 to 2021 can be found.

AE scheme participation has increased since the policy began in 2012, rising from 49% in financial year ending 2013 to 80% of employees in financial year ending 2021.

5. DWP Covid-19 Employer Pulse Survey

This publication will include data on changes in employer pension contributions due to COVID-19 from a survey of almost 4,000 employers in Great Britain between 17 June 2020 and 8 April 2021.

The interim summary report is available.

Technical notes for accompanying tables

The data behind each of the charts using ONS ASHE and DWP FRS included in the publication can be found in the accompanying tables.

  • The analysis includes members of all workplace pension schemes: occupational pension schemes, group personal pensions (GPPs) and group stakeholder pensions (GSHPs)
  • All analysis is based on eligible employees (unless stated otherwise). Amounts are deflated to 2021 earnings terms using ONS Average Weekly Earnings (AWE) values. Gross annual earnings are derived using weekly pay, and no filter has been included for loss of pay in the pay period. The ONS Average Weekly Earnings Statistics, EARN015 (KAC3) series is used
  • The corresponding earnings thresholds have been used from 2012 onwards and deflated using ONS AWE between 2008 and 2011 to determine notional equivalent AE eligibility before 2012
  • State Pension age (Spa) began to increase during 2010. The age tables take account of this change and therefore SPa varies from 2011, these changes gave also been applied when selecting employees between 22 and SPa. See State Pension age timetables for more information
  • These estimates use the Standard Industrial Classification (SIC) 2007 codes to identify industries
  • Data up to 2011 is based on Standard Occupational Classification (SOC) 2000. From 2011 onwards, SOC 2010 is used, creating a slight break in the series. Therefore, care should be taken when interpreting the full time series
  • In the amount saved tables, income tax relief on the employee contribution is calculated as the difference between the income tax due on observed earnings and the income tax that would be due if the employee contribution were treated as earnings
  • Numbers have been suppressed where the sample size is very low to prevent risk of disclosure, and where the sample size is relatively low results have been marked to indicate that they will have a relatively high degree of uncertainty. Sample size cut-offs, and rounding rules used, are different for tables using ASHE data and tables using FRS data according to the relevant guidance for each dataset and consistency with other Official and National Statistics using these datasets. See the notes for each accompanying table

Key assumptions and limitations of the statistics

ONS Annual Survey of Hours and Earnings (ASHE)

  • ASHE is based on a 1 per cent sample of employee jobs taken from HMRC PAYE records. Information is obtained from employers and treated confidentially. ASHE does not cover the self-employed nor does it cover employees not paid during the reference period
  • The 2021 ASHE data has a reference date of the week containing 21st April 2021
  • ASHE collects information on employee membership of the current employer’s workplace pension scheme. This does not include preserved rights in any former employer’s pension scheme or pensions paid by former employers
  • ASHE collects information from employers on employee jobs, although they are referred to in this Official Statistic as ‘employees’
  • The overall level of uncertainty arising from the sample size of ASHE is low, however uncertainty may be higher for particular subgroups
  • For further information on ASHE please see the Background notes section on the ONS website
  • Prior to the coronavirus (COVID-19) pandemic, the achieved sample size for ASHE was approximately 180,000 each year. However, given the challenges to data collection during the coronavirus pandemic and response rates not recovering, the final achieved sample size was 144,000 for 2020 and 140,000 for 2021. As such, ASHE estimates for 2020 and 2021 are subject to more uncertainty than usual

DWP Family Resource Survey (FRS)

  • The latest FRS data was collected throughout the 2020/21 financial year and is not collected with reference to a specific time period like the ASHE data, therefore the two sources are not directly comparable. In addition, any potential impact of AE may be lessened in FRS findings because fewer employees will have been automatically enrolled at the time they were interviewed due to the staged implementation approach

  • The impairment types used to define disability status have been changed in the 2012/13 survey to reflect new harmonised standards and therefore caution is needed where making comparisons over time
  • Participation rates calculated using the FRS include participation in personal as well as workplace pensions
  • Similar to the achieved sample size for ASHE, the challenges to data collection during the coronavirus pandemic and response rates lowered the final achieved sample size for 2020/21. As such, estimates for 2020/21 are subject to more uncertainty than usual

HMRC Real Time Information

  • It is possible that some employments may be counted more than once as stopping saving. This occurs if an employment stops saving in one month, made no employee pension contributions for at least five tax months, restarted employee contributions after this time period and then stopped making employee pension contributions once again
  • The volumes of employments stopping saving and other figures estimated using HMRC’s RTI data may differ from other estimates, such as surveys and sampled data, due to differences in counting methodologies etc. RTI only includes information on when pension contributions were made, not when a request is made to stop saving
  • Months refer to tax months. For example, the tax month of February 2022 was 6th February 2022 to 5th March 2022
  • The data in the eligible jobholder rate and employee pension contributions is based on February 2018 to March 2022
  • The data for July 2018 in the eligible jobholder rate and employee pension contributions analysis is not included, as some back-series data in this analysis is still being processed by HMRC, and has not yet been received by DWP
  • The stopping saving data for January 2022 is not final
  • Payments from pension providers are excluded from the analysis. These are identified using a pensions flag developed jointly by HMRC and DWP, as well as an additional check as of April 2021 from HMRC on specific PAYE scheme types which flag the payment as a pension as defined via data item 145 in the RTI data items guide. This has an impact on employments which had payments from both pensions and employments
  • As only employee pension contributions and tax relief under RAS schemes are reported through RTI, this analysis is based purely on employee pension contribution data. The analysis cannot identify employees saving into a workplace pension with employer-only contributions or via salary sacrifice. An employee with employer-only contributions, or saving via salary sacrifice, will be indistinguishable from an employee who is not saving into a pension, as both will have no employee pension contributions on RTI
  • Self-employed individuals are not required to submit RTI, although there are some cases where these individuals are paid through PAYE and thus will appear on RTI
  • Payments relating to company directors for NICs purposes, as defined via data item 84A in the RTI data items guide, are removed from the analysis. This impacts employments which had payments as both a company director and not
  • If the employment moved in and out of the population of interest, due to changing from employment to pension or from director to non-director, it would appear that the employment had ended. The classification of stoppage will vary depending on the length of time the employment is not in the population of interest and the length of time before the employment returns to the population of interest
  • If an individual has multiple employments, the individual could be represented multiple times in RTI.
  • Some information submitted by employers for RTI is Late, Missing or Incorrect. This is common for all administrative data
  • Taxable pay can differ from gross pay for various reasons, including the type of pension contributions and salary sacrifice (an agreement to reduce an employee’s entitlement to cash pay, usually in return for a non-cash benefit).
  • Pension contributions were calculated by using the change in year-to-date pension contribution variables. If this value was less than £0.001 or was missing, the in-period pension contributions were used
  • Daily earnings were calculated by dividing the change in year to date taxable pay on a payment date by the number of days since the previous payment date. It does not take into account the number of days or hours worked. It is not possible to calculate this for the first payment for an employment
  • When running the process in RTI contributions for a May tax month, the difference between the most recent payment date and the start of the tax year is observed, rather than the usual difference between two payment dates. This means that the comparison period is shorter, resulting in a slightly inflated daily income for this month. This effects the count of eligible jobholders for the May tax month, as more employments are classed as earning above the earnings trigger of £10,000
  • The population of identified pension savers may include employments that started pension saving before AE was introduced as mandatory. These cases usually relate to employers that provided the option of pension saving before AE was rolled out

Status of the statistics

National/Official/Experimental statistics

These are Official Statistics.

The DWP FRS data is designated by the UK Statistics Authority as National Statistics.

Statistics sourced from HMRC Real Time Information in this publication are badged as experimental statistics. This is due to the ongoing development of the data systems and statistics used to support. The methodologies used to produce these statistics are constantly monitored and are subject to revision as improved data sources and methodologies become available.

Quality Statement

All data sources used in this publication have undergone detailed quality assurance processes, including investigations of outliers.

ONS ASHE and DWP FRS have their own measures in place. In addition, we pay attention to the pension variables within these surveys.

HMRC RTI data and analysis used in this publication has undergone a detailed quality assurance process by both HMRC and DWP.

Revisions

New ONS ASHE data is marked as provisional and the previous year’s data is revised with each new release. Estimates from the 2020 ASHE survey have been subject to small revisions since the provisional estimates used in last year’s publication.

Average amount saved metrics are calculated using ONS Annual Survey of Hours and Earnings data. For the September 2021 publication onwards, we made minor revisions to the methodology used to calculate average amount saved. This is now a median measure, not a mean average as used in previous publications. This is in line with advice from ONS to improve accuracy of the values included in this publication.

Feedback

We welcome feedback.

We are committed to improving the official statistics we publish and therefore will be launching a user consultation to generate feedback on the long term future of this publication in Autumn-Winter 2021. Please check the Workplace Pension Participation and Savings Trends page for updates.

We would welcome any views you have using the following contact information:

Consultation

We are committed to improving the official statistics we publish and therefore will be launching a user consultation to generate feedback on the long term future of this publication ahead of the next publication. Please check the Workplace pension participation and savings trends collection page for updates about this consultation.

Latest release

Workplace pensions participation and saving trends: 2009 to 2021

Previous releases

Workplace pensions participation and saving trends: 2009 to 2020

Workplace pensions participation and saving trends: 2009 to 2019

Workplace pensions participation and saving trends: 2008 to 2018

Automatic enrolment evaluation reports were published annually between 2013 and 2019. The latest publication can be found here:

Automatic Enrolment Evaluation Report 2019

The Office for National Statistics has previously published statistics on the participation in 2020 of all employees, using the same data source used in this publication for eligible employees. Read the latest Employee workplace pensions in the UK: 2020 provisional and 2019 final results publication.

More information about AE

Automatic Enrolment - workplace pension duties

Workplace Pensions

More Information about HMRC RTI

Guidance on RTI Data Items from April 2021

Other National and Official statistics

Details of other National and Official Statistics produced by the Department for Work and Pensions can be found on the DWP website and at the following links:

DWP benefit statistics dissemination tool

A schedule of statistical releases over the next 12 months and a list of the most recent releases

In accordance with the Code of Practice for Statistics, all DWP official statistics are announced.

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