Although over 75% of UK employees are now in a workplace pension - a rise of 30% since 2012 - this hides the truth that underneath this headline there are pockets of significantly lower participation:  

• Whilst 90% of public sector employees have a workplace pension, it's only 73% in the private sector;
• Full-time employees are 1.5 times more likely to have a pension as part-time employees;
• There are significant differences between the private and public sector part time employees - only 47% of part time private sector employees have a workplace pension compared with 83% of public sector part-time employees;
• Only 41% of low earning employees in the private sector (earning £100 - £199 per week) have a workplace pension compared with 93% of public sector employees; and
• Only 20% of 16-21 year olds have a workplace pension compared with 80% of those aged 22-29.

These figures from the Office for National Statistics highlight that those who are part-time (more likely to be women) or earn lower wages now are also more likely to miss out on income from a workplace pension in later life. We've already highlighted the issues surrounding the gender pensions gap in a previous blog and these statistics highlight the need to bring forward some of the solutions suggested in that blog.

The statistics also point us towards some of the causes of these gaps:

• The lowest earning employees (those earning less than £200 per week) are not eligible to be automatically enrolled;
• 16-21 year olds are also not eligible to be automatically enrolled;
• By contrast the public sector schemes do not have these minimum age and earnings thresholds for enrolment which likely explains at least part of the reason for the gap; and
• A further distinction is that in private sector schemes employer contributions are only payable on earnings above the lower earnings limit (currently £120 per week) whereas they are payable on all earnings in the public sector schemes.

For employers wanting to increase participation for low-earning, younger and part-time employees, there are a number of potential options to consider:

• Contractually enrol all employees into your workplace pension scheme;
• Pay employer contributions on all earnings; and
• Consider paying the whole of the mandatory contributions (7% of total earnings) for lower paid employees.