The Department for Work and Pensions published new figures today showing that around nine in 10 (90%) of eligible employees in Great Britain were saving into a workplace pension in 2025, continuing the trend of previous years. The data reveals 22.6 million eligible employees saving, an increase of 0.6 million more than in 2024 and a 1 percentage point rise in the pension participation rate.
Experts warn headline numbers hide deeper issues
One financial adviser warned that “90% participation is a headline about how many people are in the queue, not how much is in the pot”. Another said “Defined Benefit (DB) schemes are creeping towards extinction, which leaves the state pension at up to £12,500 a year and whatever assets/savings you can build up”.
The DWP report also revealed that the overall workplace pension participation rate of all employees in Great Britain continued to be around eight in 10 (82%) in 2025, with 24.2 million employees saving. This is a 0.6 million greater number of employees saving compared to 2024.
Frozen earnings trigger and micro-employer gaps
The number of employees saving continues to increase year on year, something the DWP attributes to an increase in employees brought into auto-enrolment eligibility, as the earnings trigger (currently £10,000) has remained frozen in recent years. However, only around 55% of eligible employees working for a micro employer (those with fewer than five employees) in the private sector are saving into a workplace pension, and just 67% of Pakistani and Bangladeshi eligible employees are saving.
The DWP observed that the vast majority, 94%, of the 12.9 million individuals in receipt of a private pension payment in 2025/26 are currently in receipt of a defined benefit or an annuity. However, this is slowly changing. When assessing private pensions accessed for the first time, the proportion receiving a lump sum or other defined contribution product rose from 37% (280,000) in the 2016/17 financial year to 49% (410,000) in the 2025/26 financial year.
Advisers call for focus on adequacy not just enrolment
Anita Wright, Chartered Financial Planner at Ribble Wealth Management, said people needed to look beyond the headline figure. She continued: “90% participation is a headline about how many people are in the queue, not how much is in the pot. Auto-enrolment counts bodies and says nothing about whether the legal minimum contribution buys anyone a retirement and it simply doesn’t.
“And look at why the number rose. The £10,000 earnings trigger has been frozen for years, so ordinary wage growth quietly drags more low earners in.
“Almost everyone drawing a private pension today has a guaranteed income. Someone else made the promise. Someone else carried the risk. Among those retiring for the first time, nearly half now take a cash lump sum or a pot they have to manage themselves.
“No promise. Just a balance, a set of choices and the hope that markets behave. That is the transfer, happening in plain sight.
“One generation retired on guarantees. The next retires on a market, a drawdown decision, and whatever inflation leaves behind. Signing people up isn't the same as them saving enough. We find out the difference in 20 years.”
Rob Mansfield, Independent Financial Advisor at Tonbridge-based Rootes Wealth Management, also said the end of DB schemes was a cause for concern: “Defined Benefit schemes are creeping towards extinction, which leaves the state pension at up to £12,500 a year and whatever assets/savings you can build up. All the liability has been passed onto the individual with very little education or risk warning.
“We've got a cost of living crisis that limits how much some people can save and then, of those that can, they face a complex system that is constantly tinkered with by governments. Many people are sleepwalking towards a struggle in retirement.”
Eamonn Prendergast, Chartered Financial Adviser at Bromley-based Palantir Financial Planning, was ambivalent: “Auto-enrolment continues to be a success story, as getting around 90% of eligible employees saving is a major achievement. But participation is only half the story.
“The real issue is adequacy, as many people are saving at minimum levels, which simply won’t deliver the retirement they expect. The gap among micro employers is also a concern, highlighting that access and engagement still aren’t consistent across the workforce.
“What we’re also seeing is a clear shift toward defined contribution pensions and greater flexibility at retirement, which puts more responsibility on individuals to make the right decisions. The risk is that, without guidance or advice, people could make choices that don’t support their long-term financial security.”
Graham Nicoll, financial planner, Chartered FCSI at NCL Wealth Partners, said “automatic enrolment has transformed workplace pension saving, but participation is increasingly shaped by employer culture”.
He added: “In smaller firms, where pensions can feel like an optional benefit and opt-out decisions are more visible, participation may be lower. Larger employers often normalise pension saving through stronger communication and workplace culture, making staying enrolled feel like the default. Closing this gap will require greater engagement, not just automatic enrolment.”
Nouran Moustafa, practice principal at Roxton Wealth, also cautioned that, while the headline 90% participation figure was positive, “it risks hiding the real pension problem”.
She continued: “Getting 90% of eligible employees enrolled is not the same as getting 90% on track for a comfortable retirement. Participation is only the first hurdle, while adequacy is the real test.
“The 55% participation rate among micro-employers is the figure that should worry policymakers most. It shows that the smallest workplaces remain the weakest link, where lower pay, limited HR support and poor pension communication can leave people behind.
“The shift towards lump sums and other defined contribution withdrawals also means more responsibility is moving from institutions to individuals. That offers flexibility, but it also creates greater risk of poor timing, overspending and running out of money.
“We have built a strong enrolment system; the next challenge is making sure people save enough and are supported to turn those savings into a sustainable retirement income.”
Kate Underwood, founder of Southampton-based Kate Underwood HR and Training, said it was the eligible employees in the smallest businesses who were missing out the most.
She continued: “For many micro-employers, it isn’t a lack of commitment. It’s the reality of rising employment costs and tight cash flow.
“Auto-enrolment has been a huge success and schemes like NEST have made it much easier for small businesses to offer workplace pensions. But enrolling someone is only the first step. Too many employees believe the minimum contribution will be enough, when in reality it may fall well short of the retirement they hope for.
“The next challenge isn’t getting people into pensions but getting them engaged with their pension. Better education and clearer communication will have a far bigger impact than simply increasing participation numbers.”
