Automatic enrolment was brought in to help people save for their pensions and has largely been a success.
This year there was a substantial increase in awareness of auto-enrolment from 39% to 76% in 2016. However, there are still gaps in people’s understanding and it seems more than two-thirds of working people do not realise there will be increases in the minimum contributions they have to make to their workplace pension schemes.
A study recently carried out by Scottish Widows found that 68% did not know the figures were set to rise, although rather more encouragingly, only 3% said they will opt out when their contributions do increase. 78% said they would stay enrolled. The pensions company found a few factors that would encourage people to save more:
-12% want more information on pension or retirement planning.
-21% think a digital platform to view pension savings online would help.
-27% would like further tax incentives.
Pensions Minister, Richard Harrington, has said there is no excuse for small businesses failing to give all their employees the option of a pension. It’s clearly more important than ever that people are aware of auto-enrolment, so please get in touch if you need advice.