Most auto-enrolled workers ‘will stay in’
New government figures suggest most people will stay in pension schemes under the new automatic enrolment initiative.
The Department for Work and Pensions published its latest survey on retirement saving on 26 November, which found that 70 per cent of those questioned said they would be likely to stay in a pension scheme if they were eligible to be automatically enrolled.
Minister for Pensions Steve Webb said: “Automatic enrolment is helping millions to save for the first time and this survey shows most people will ‘stay in’ when they are offered the chance to save in a pension. The simple fact of being offered a company pension is a clear driver to helping people save.”
The research, carried out with 1,949 adults across Great Britain also highlighted the need for pensions people can understand. Almost two-thirds (59 per cent) of respondents felt they did not know enough about pensions to decide with confidence how to save for retirement.
Two-fifths (41 per cent) of respondents with a private pension had no knowledge of what their income would be in retirement, rising to four-fifths (79 per cent) for those without a private pension.
Fear of not having enough in retirement was the key reason people gave for saving into a pension (32 per cent), followed closely by qualifying to join a company scheme (28 per cent) and starting work (23 per cent).
But among young people aged 18 to 24, two-fifths (39 per cent) said they actively avoided thinking about retirement altogether.
Mr Webb added: “Too many people are put off saving for their old age by a pensions system which is too complex and too few know clearly what they will get when they retire.
“We are taking the hassle out of saving in a pension through automatic enrolment, we are working with the industry to restore trust and confidence in pensions and we will reform the state pension to make it simpler and clearer to understand.”