New data reveals impact of automatic enrolment in Scotland

The PLSA said it has also recorded changes in different parts of the UK, with Scotland recording an increase of 31 per cent in private workplace pension participation.

Nigel Peaple, deputy director DC, Lifetime Savings and Research, Pensions and Lifetime Savings Association, said: “Automatic enrolment means that more people are saving into a workplace pension than ever before. Since 2012, 7.6 million more people have been automatically enrolled into workplace pensions. It is heartening to see such fantastic increases across the UK, particularly in areas such as Scotland, which started off with just 44 per cent saving into a private workplace pension in 2012, and is now showing figures of 75 per cent.

“However, at the moment, the minimum legal contribution is 2 per cent of band earnings, which means someone on £25,000 would only be putting away £382.48 per year. This is set to rise in 2019 when legal minimum contributions will reach 8 per cent of band earnings. While this will certainly be an improvement, the PLSA believes that for people to enjoy a good income in retirement, minimum contributions must increase to around 12 per cent over the course of the 2020s.

“We would suggest that if your employer offers a workplace pension, you should certainly consider joining. Those who don’t will miss out on the contributions they make as well as the tax relief offered by the Government. It is vitally important that people start saving into a pension as soon as possible as the longer you save, the bigger your final pot is likely to be.”