Nine in 10 eligible employees saved into workplace pensions in 2025, DWP finds

“The bigger challenge is ensuring they are saving enough to achieve the retirement they want.

“Our research suggests today’s Generation Z could require pension wealth of more than £3 million for a comfortable retirement, or around £2.4 million when applying the 4% withdrawal rule. 

“While these figures may seem daunting, they reflect the reality of longer life expectancy, inflation and rising living costs over time.

“It’s also notable that opt-out rates have edged higher. Cost-of-living pressures continue to squeeze household finances, making long-term saving harder for some people to prioritise. 

“Meanwhile, lower participation among some groups and employees working for the smallest businesses shows there is still work to do to make retirement saving truly universal.

“Too many people still treat pensions as a ‘set and forget’ product, despite them often being among their most valuable financial assets. Automatic enrolment has normalised pension saving. 

“The next step is to normalise pension engagement, helping people understand whether they are on track, review contributions regularly and make informed decisions throughout their working lives. 

“Otherwise, too many risk reaching retirement only to discover they have saved too little, too late.”

David Pye, director at Broadstone: 

“The continued rise in workplace pension participation is a major success story with the data demonstrating the lasting impact of automatic enrolment in bringing millions more people into pension saving.

“Pension accumulation is now firmly established as a normal part of working life however participation alone does not guarantee an adequate retirement income. 

“While total annual saving has increased substantially since 2012, minimum automatic enrolment contribution levels remain unlikely to provide many employees with the standard of living they expect in retirement, particularly where people begin saving later or experience prolonged gaps in contributions and there is the constant danger that this isn’t something employees are aware of.

“The recent increase in opt-out rates to around 11% to 12% is also worth monitoring closely. 

“Although the rise remains relatively modest, it may indicate that continued pressures on household budgets through cost-of-living challenges are forcing more employees to prioritise their immediate financial needs over future ones.

“The next phase of pension policy must build on the success of automatic enrolment by addressing adequacy. 

“This should include carefully considering how employees can be encouraged to engage with their pensions and how and when contribution rates can be increased. 

“Alongside this, it should extend saving to the self-employed as well as more lower-paid and younger workers, whilst ensuring employees understand the value of employer contributions and tax relief they could lose out on by opting out.”