- New figures which show that auto-enrolment has reversed the decline in pension saving have been welcomed by the government's business champion for older workers, Ros Altmann.

She said that the latest ONS data for pension scheme membership show that after years of decline, there was a rise in the numbers of people contributing to pension schemes in 2013.

Pension scheme membership reached a record low in 2012, with a massive drop from 8.2 million in 2011, to 7.8 million in 2012. Last year, the number increased by 300,000 to 8.1 million.

She says: "It seems that auto-enrolment is having an impact on pension coverage, but so far it seems to have benefited public sector workers more than those in the private sector.

"Membership of pension schemes rose fastest for public sector workers, although 2013 did see the first increase in pension membership in the private sector this century.

"Nevertheless, coverage remains very low in the private sector and continues to fall for the self-employed."

Altmann adds: "The 2014 pension reforms could well herald a significant increase in pension participation by the self-employed. By removing the inflexibility of pensions, it is likely that the self-employed will look more seriously at contributing again, rather than using ISAs. Indeed, they may decide to switch some of the ISAs into pensions, due to the tax advantages. Many of those who are self-employed are perhaps also relying on selling their business to fund their retirement, however having a pension in place may be a useful diversification of their risks.

"The state pension reforms will give the self-employed better pension rights in future, but they will still need more than this for a decent standard of living in later life. It will be interesting to see how the trends in pension membership develop as the pension reform programme progresses."

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