Employees being auto-enrolled into pension schemes are increasingly likely to opt-out as small and medium-sized employers hit their staging dates, a Government survey reveals.
A DWP survey of 50 employers with staging dates this year found 12 per cent of workers who were auto-enrolled between January and July subsequently left the pension scheme, compared to 9 per cent in last year’s study.
Older and part-time workers were far more likely to opt-out, with more than one in five over-50s leaving schemes, compared to just 7 per cent of under-30s. Nearly a fifth (18 per cent) of part-time workers opted-out, compared to 10 per cent of full-time staff.
The most common reasons employees gave for opting-out included concerns over the affordability of contributions, already having adequate retirement savings, being close to retirement and a feeling that auto-enrolment contribution rates are too low to fund retirement.
Most of the employers surveyed chose a master trust as their scheme for auto-enrolment, with Government-backed scheme Nest the most popular. The DWP reports “a small number of employers mistakenly believed that they had to use Nest for workers they had automatically enrolled”.