Pensions - Auto-enrolment
Research on the advent of auto-enrolment has been published by the Department for Work and Pensions with some surprising results
The Department for Work and Pensions (DWP) has published quantitative research on autoenrolment among small and micro employers, based on employers who went through the enrolment process between September 2016 and March 2017.
The key findings were:
• 81% of small employers agreed workplace pensions are a good thing.
• 65% agreed it was their responsibility to encourage staff not to opt out.
• Despite the above, only just over half (54%) viewed it as their responsibility to ensure staff could manage financially in retirement.
• 70% found the ongoing admin of workplace pensions easy to cope with.
• Consistent with other populations, opt-out rates are low, with 85% of members staying in their pension.
• Part time and older workers are more likely to opt out.
Tom McPhail, Head of Policy at Hargreaves Lansdown said: “Auto-enrolment is working well. Even among the most challenging sector of the employer community, the very small businesses, there’s good support for the policy, the administration isn’t too much of a burden and the employees are staying in their pensions. So far so good. “There are two big challenges to face next. Firstly we have to put employees in control of their own retirement savings, rather than forcing them to switch to a new pension every time they change jobs. This aspect of the system is madness and runs against the grain of the way people manage their finances. Secondly we have to promote better engagement on the part of employees, encouraging them to take an active interest in their savings; in particular we need to encourage them to think about how much they are saving and where their money is invested.”
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