One in ten (9.9%) of new savers opted out of pension contributions in the third quarter of the 2024-25 tax year, according to the latest statistics from the Department for Work & Pensions.

While nine in 10 eligible employees were saving into a workplace pension, savings remained low among workers not eligible for auto-enrolment.

Pension participation for those not saving in a workplace pension has improved, however. In 2024 33% of those not eligible were saving for a pension, compared to 28% in 2023.

Participation rates among employees of ‘micro’ employers with less than five members of staff were low, at 59%.

The DWP also identified a lower than average proportion of Pakistani and Bangladeshi workers paying into workplace schemes, at 68%.

David Brooks, head of policy at Broadstone, said the latest figures demonstrated how lower earners, the self employed and some ethnic minorities were at risk of failing to save enough for retirement.

He said: “While the DWP’s annual publication of workplace pension saving points a rosy picture with strong and growing participation among eligible employees, there remains cause for concern.

“One in 10 new savers are opting out of their pensions demonstrating the ongoing battle between longer-term saving and immediate budgetary constraints. The findings released alongside the launch of the Pensions Commission show that nearly 15 million people are under-saving for retirement and nearly half (45%) of working age adults are saving nothing at all into a pension, with lower earners, the self-employed and some ethnic minorities particularly at risk."

Becky O’Connor, director of public affairs at PensionBee, agreed the statistics highlighted the urgent need for policies to bring lower income, self-employed and gig economy workers into pension saving.

She said: “Auto Enrolment has been a success, but with a stabilisation in rates of saving for the majority of eligible workers and persistent gaps among those who are not automatically enrolled, there is a clear-cut case for the Government to turn its attention to how to improve long term saving among those currently left out of the system.

“The demand for pensions among workers who are not auto-enrolled is there, as rates of pension saving in this group have increased between 2023 and 2024 seemingly organically, so a policy push is likely to be successful and well received.”