Just over 34% of UK employers giving the minimum to employee pensions

New data from Investing Reviews reveals over 34% of UK employers are only contributing the minimum amount to employee pensions, while some still contribute nothing. The minimum pension contribution is 3% of staff earnings.

The study, titled The British Pension Report, analysed UK data relating to workplace pensions to reveal enrollment rate by region, age group and occupation as well as where Great Britain stands globally in terms of workplace pensions.

According to the study, 1.1% of UK employers are contributing absolutely nothing to their employee pensions; 20% of employers contribute between 4% and 8%, and 13.4% are giving between 15% and 20% to their staff member’s pensions.

How employers are contributing to employee pensions:

Contribution  % of employers 
1 Zero 1.1%
2 Under 4% 34.5%
3 4% to 8% 20%
4 8% to 10% 4.8%
5 10% to 12% 3.6%
6 12% to 15% 10.9%
7 15% to 20% 13.4%
8 20% and over 11.7

The study also revealed the employee contributions by occupation and found that employees in professional occupations contributed 7% and over to their own pensions. Sales and customer service occupations contribute 3% to 4% of their earnings to their pensions, whilst those working in associate professional and technical occupations contribute the same.

Most common pension contribution by occupation: 

Occupation Employee pension contributions  Proportion of people working in occupation  
Managers, directors and senior officials 4% to 5% 21.7%
Professional occupations 7% and over 52.9%
Associate professional and technical occupations 3% to 4% 19.4%
Administrative and secretarial occupations 5% to 6% 27.4%
Skilled trades occupations 3% to 4% 27.7%
Caring, leisure and other service occupations 5% to 6% 38.4%
Sales and customer service occupations 3% to 4% 32.4%
Process, plant and machine operatives 4% to 5% 29.6%
Elementary occupations 5% to 6% 26.6%

When looking at how the British pensions affect UK citizens, the report also found:

The percentage of employees enrolled in workplace pensions seems to peak at the 40 to 49 age group, with 84.3% of workers enrolled before it slowly declines as workers get closer to retirement age.

While the 16 to 21 age group has the lowest enrolment rate, this is likely due to the fact that a large number of those in work in this age range will be in part-time employment and low-paid work.

When broken down by region, those living in Wales and working in the public sector are most likely to have a workplace pension, while for those working in the private sector, it is Londoners who are more likely to have a workplace pension.

Unsurprisingly, the youngest age group has the lowest likelihood of high pension contributions, with just 10.2% contributing 7% or more. The age groups with the largest percentage of high contributions were 40-49 and 50-54.

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