Good times ahead? Private sector employees up contributions

In numbers that will be pleasing reading for the pensions minister, Scottish Widows’ Retirement Report 2014 has found workers are saving more of their earnings for retirement. The average contribution for employees of companies with more than 250 staff is now 11.6 per cent. 

The report found that on average British workers were contributing 10.2 per cent of their earnings to saving for retirement. This is an increase from 9.1 per cent last year and 8.9 per cent in 2012.

“In the private sector, the average savings ratio has increased from 9.6 per cent to 11.1 per cent but has reduced from 8.9 per cent to 8.7 per cent in the public sector,” the Scottish Widows’ report stated.

Private sector employers with more than 250 employees saw the proportion of earnings saved by employees increase to 11.6 per cent from 9.7 per cent. 

Industry observers have largely attributed the rise in savings to to auto-enrolment, but warned of the shortfall for whom the reform is not hitting – which Labour has pledged to reduce by 1.5m people. 

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