There has been a dramatic fall in the number of private sector employees contributing to workplace pension schemes over the past five years, new figures have shown.

The Department for Work and Pensions (DWP) has revealed that just over a quarter of workers in the private sector are paying into a company pension, down from a third in 2007.

This fall can be attributed to the dwindling number of employers offering pension plans as just 31 per cent of companies now offer their staff the chance to save for their retirement, compared to 41 per cent in 2007.

Pensions minster Steve Webb is hoping that the government's auto-enrolment programme will help boost workplace pension provision.

Under the scheme, which begins in October, an estimated ten million people will be enrolled into company pensions for the first time.

"Automatic enrolment into workplace pensions will start the monumental shift we need to get millions more people in Britain saving for their retirement," said Mr Webb.