Auto Enrolment: How many are opting-out?
With the pensions auto-enrolment regime now nearly one year old, the government has published data relating to the number of employees exercising their right to opt-out after they have been auto-enrolled. The government sampled 50 employers ranging in size from 6,000 to 120,000. Of the employees automatically enrolled to a pension scheme, only 9% (41,440 out of 460,000 employees automatically enrolled) exercised their right to opt out, with higher rates of opt-out reported for employees aged 50 years or more, or in schemes where the employee contributions were higher than the minimum level required by law (currently 1%).
The Pensions Minister Steve Webb has declared this to be a positive indication that the government’s pioneering scheme will be successful in “reprogramming” employees to save for their future now.
The Pensions Regulator has urged employers to start thinking about auto-enrolment well in advance of their staging date. Whilst the data demonstrates an increase in awareness of large employers about the new pension saving requirements, awareness amongst small to medium employers remained low.