NAPF: Government must do more to stop auto-enrolment opt-outs
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The Government has been urged to “do more” to fulfil its pledge to reinvigorate occupational saving after a survey revealed a pensions confidence crisis risks derailing automatic-enrolment.
A Populus survey of 896 employees, carried out on behalf of the National Association of Pension Funds, reveals just 48 per cent of working adults are confident in pensions compared to other methods of saving.
Just 42 per cent said they are confident, resulting in a ’Pensions Confidence Index’ of -6 per cent. It is the first time the figure has been negative in the index’s four year history.
NAPF chief executive Joanne Segars (pictured) warns that, unless policymakers can boost confidence in pensions, people will opt-out of automatic-enrolment.
She says: “It’s worrying that from next year millions of people will be auto-enrolled into a savings vehicle they have so little faith in. Politicians have to boost confidence in pensions, or people will simply opt-out. We need a pension framework that the public can believe in and rely on.
“We urge the Coalition Government to do more to fulfil its own pledge to reinvigorate pensions.”
Almost 60 per cent of people said they are not confident that their pension will provide a sufficient income in retirement, with only a third saying they are confident.
Despite this, some 35 per cent of respondents said a pension is the best way to save for retirement. However, this figure has fallen from 44 per cent in 2010, with both Isas and property growing in popularity.
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Readers' comments (4)
Glen McKeown | 20 Sep 2011 10:34 am
There's an old saying "Before opening mouth, engage brain".
This is the second doom and gloom article in respect of Auto-Enrolment in the last few days - and it hasn't even started yet.
The true irony of this one is the NAPF request for the Government to do more to encourage take up (even though we have no actual idea of what that figure is). So the message coming across is "We believe Auto-enrolment will be a failure". If you keep telling everyone that it will be a failure people are likely to believe you, and act in accordance. This is what is called a self fulfilling prophecy.
The legislation already makes it difficult to Opt-Out, so why emphasise that it is possible. Just for the sake of a good headline?
The survey shows that almost 50% of those surveyed are happy with pension saving. Good base to start on. But if 48% are confident in para 2, how come only 42% are confident in para 3.
And in the final paragraph we find that 35% consider pensions the best way to save, but others are using ISAs and property. Although no overall figures are given it is clear that people do take saving for retirement seriously, albeit in their own particular ways, so why is the article so negative.
As so much research has shown peer pressure is the best method to get people to conform; if articles like this keep confirming the negative, people will conform to the negative.
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Steve | 20 Sep 2011 10:59 am
Why would the government be confident in anything the government introduced? I paid into a pension fund most of my working life and having retired with a small pension indexed each year by the RPI I thought well ive done everything I can. Then the government comes along changes the way my pension is updated from RPI to CPI and with the stroke of a pen have stolen £240 from me this year and 10s of thousands over the rest of my expected life. If they can do this to current pensioners why would anybody trust them with their money.
If I had my life to live over I would not have wasted money on a pension or saving for retirement. My savings decrease each year in real terms and the government are probably plotting other ways to rob me of what is left of my pension.
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Adrian Hanney | 20 Sep 2011 6:14 pm
The pension system in this country is a total mess.
I wonder if this would be the case if those in Westminster were not in a gold plated scheme but lumped in with the rest of us!
People won't save if they can't see the benefits.
Means testing must go. It really does act as a disincentive to save for those on lower wages.
The basic state pension must be at a good level for all those who meet the qualifying years of contributions and less for those without full years contributions.
That's whats going to happen you all say! Well no it won't. I confidently predict means testing will still be here in twenty years, undermining anyone who has tried to do the right thing.
If serious about NEST means testing needs to be got rid of first or else millions will opt out from NEST as they will gain nothing against means tested benefits, and if means testing does go (unlikely) those opted out will not suddenly be queing up to opt back in.
Yet again an avoidable disaster about to be dished out to us by people it doesn't effect.
Depressing.
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Adrian Hanney | 20 Sep 2011 6:14 pm
The pension system in this country is a total mess.
I wonder if this would be the case if those in Westminster were not in a gold plated scheme but lumped in with the rest of us!
People won't save if they can't see the benefits.
Means testing must go. It really does act as a disincentive to save for those on lower wages.
The basic state pension must be at a good level for all those who meet the qualifying years of contributions and less for those without full years contributions.
That's whats going to happen you all say! Well no it won't. I confidently predict means testing will still be here in twenty years, undermining anyone who has tried to do the right thing.
If serious about NEST means testing needs to be got rid of first or else millions will opt out from NEST as they will gain nothing against means tested benefits, and if means testing does go (unlikely) those opted out will not suddenly be queing up to opt back in.
Yet again an avoidable disaster about to be dished out to us by people it doesn't effect.
Depressing.
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