A new study has found that more than one in three employees in the UK now has a pension set up via the Government’s auto-enrolment initiative, although, worryingly, 17 per cent have no pension at all.
The poll found that 36 per cent of respondents had pensions created under auto-enrolment, 17 per cent had a standard personal pension (SPP), 8 per cent had a standard self-invested personal pension (SIPP) and 7 per cent had a stakeholder pension. However, in addition to those without any form of pension, 6 per cent said they had no idea what sort of pension they had.
All of this suggests that auto-enrolment has already overtaken every other form of pension, including personal pensions, in a very short space of time and looks on track to hit targets over the next two years when 1.8 million small and micro-businesses have staged.
However, just under 20 per cent of the workforce in the UK said they either had or would be opting out of their workplace scheme, which exceeds the Government’s forecast of a 15 per cent opt-out. That said, the Government’s own figures suggest that opt-outs are only around 10 per cent currently.
The study also found that just over a quarter of employees cited lack of funds as the reason to opt out, while another 17 per cent said they would prefer not to invest their money in a pension.
Despite this, 56 per cent said they did not think they were saving enough, even though they are uncertain about the future of the state pension and falling savings rates.
Furthermore, the research suggests that, in many cases, employees could afford to put more aside but have no intention of contributing to a scheme and almost half of those polled admitted that they preferred not to think about saving for old age.
Meanwhile, separate research has revealed that more than half of employers believe auto-enrolment is a burden and almost 40 per cent said it was unfair. However, 72 per cent said they felt it would not hold back their plans for growth.