More than two million workers have begun saving into a workplace pensions scheme as a result of auto-enrolment, The Pensions Regulator (TPR) has said.

TPR's auto-enrolment registration report revealed that more than 3,500 employers have now joined the workplace pensions since the project began in October 2012.

The news has been welcomed by the industry, however concerns have been raised that 2014 will be the "real test" for auto-enrolment.

The latest influx of workers to be auto-enrolled came from the charity the British Heart Foundation, which has helped to push the figure past the two million landmark.

Pensions minister Steve Webb said: "It is great news that auto-enrolment is beginning to make a positive difference to the retirement prospects of workers. The changes to workplace pensions being introduced now are set to help millions more people to achieve many happy new years in the future.
"Over 3,500 employers so far are helping us to create a fairer society by ensuring that pensions are no longer the preserve of the few. And the message to employers is make sure you're ready for the date your workforce joins the two million already in."
The regulator said that employers should arrange their pension provision in plenty of time and that they should have an agreement with a provider in place six months before staging.

Charles Counsell, TPR executive director of auto-enrolment, said: "If they have not done it already I would hope the first thing every employer does when they get back to work after the Christmas break is to check their staging date and prepare for automatic enrolment.

"The clock is ticking and if employers don't plan ahead they could face unnecessary challenges and costs in the new year."

The National Association of Pension Funds (NAPF) has welcomed the news that auto-enrolment has started well.

However NAPF chief executive Joanne Segars said: "The real test will come when small and medium-sized employers, who have fewer resources and less pensions know-how start enrolling staff next year.

"The challenge now is for the Government and TPR to make sure these employers understand what they have to do to comply."

Laith Khalaf, Hargreaves Lansdown head of corporate research, said that it was "extremely positive" that two million people are now saving into a pension who had not done so before.

However he said that TPR's report also shows that three million workers have not been auto-enrolled because they do not earn enough to qualify to be auto-enrolled, or they have been "left-behind" because they have several part-time jobs.

Khalaf added: "The number of companies auto-enrolling is beginning to expand exponentially, and indeed the true test for auto-enrolment lies in 2014 and beyond. Employers have the difficult task of complying with the regulations, at a time when there will be unprecedented demand for the services of pension providers and advisers.

"Throw into the mix the fact that the Government is still pondering the final rules, including a price cap, and 2014 has the potential to plunge the auto-enrolment programme into mayhem."

First published 18.12.2013

monique_simpson@wilmington.co.uk