UK Low Paid Workers Save for Retirement for First Time

Low-paid workers in the UK are saving for retirement for the first time, according to official figures.

The Department for Work and Pensions (DWP), which analysed new data from the Office for National Statistics (ONS), revealed that non-traditional saving occupations such as sales assistants and dinner ladies are now building up their pensions.

The government said the figures showed that there were almost one million additional savers in Defined Contribution (DC) workplace pension schemes in early 2014 since 2011.

The figures come as auto-enrolment, where employers have to place workers into an occupational pension scheme, continues to roll-out across British businesses.

"The tide is turning for pension saving in Britain after decades of decline," said Steve Webb, the pensions minister.

"For the first time, thousands of hardworking people with jobs or businesses that have not traditionally provided pensions can start saving with a contribution from their employer, helping them towards a more prosperous future and restoring fairness in retirement."

The research also revealed that the sectors with the biggest rises were sales and customer service – up 8%.

Thanks to an increase of 160,000 cashiers, sales assistants, supervisors and related roles who now have pensions.

In addition, elementary occupations which rose 5% – an increase of 130,000 security guards, cleaners and dinner ladies among those now in a workplace scheme.

There was also an increase of almost 1% in caring, leisure and other occupations means an increase of 20,000 caretakers, childcare assistants, travel agents and other workers in this sector building up retirement savings.

Laith Khalaf, Head of Corporate Research at financial services firm Hargreaves Lansdown, added: "Auto-enrolment is touching the parts other pension initiatives have failed to reach.

"The success of the programme is integral to the government's plan to defuse the 'pensions time-bomb'. So far, so good, but key challenges remain.

"Chief amongst them is making sure these new pension members stay on the savings wagon, and providing them with the financial education needed to make sense of the wide range of options now available when they hit retirement."