Commenting on The Department for Work & Pensions (DWP) report on workplace pension participation and savings trends, Troy Clutterbuck CEO, NOW: Pensions said: “The DWP statistics show that auto enrolment has delivered on its promise of getting more people saving. But, the fortunes of public and private sector workers are widening, with public sector employees now having twice the pension savings of those in the private sector.
“On average, our members have just £412 saved. Although minimum contributions will rise to 8% of qualifying earnings in April next year, this alone won’t be enough to bridge the growing gap between public sector and private sector pension savings.
“To prevent private sector savers being bitterly disappointed when they reach retirement, government need to grasp the adequacy nettle. A good starting point for this will be basing contributions on every pound of earnings. Long-term, the target has to be contributions of 12 – 15% with a more even split between the employer and employee.”