Fewer than one in 10 workers who were automatically enrolled into a pension scheme between October 2012 and April 2013 decided to opt-out, according to official Government statistics.
Auto-enrolment was introduced for the UK’s largest employers in October last year. Under the reforms, companies are required to offer workers a pension scheme which meets minimum standards set out by the Government.
The Department for Work and Pensions has today published the first official auto-enrolment opt-out statistics. The Government’s definition of ‘opt-out’ only covers employees who decide to leave a pension scheme within one month of the date they were auto-enrolled.
The DWP analysed opt-out rates from a sample of 42 employers in the public and private sector whose staging date fell between October and April. The employers represent around 1.9 million workers.
The average opt-out rate recorded in the study was 9 per cent, with the majority of employers reporting opt-outs of between 5 per cent and 15 per cent.
Overall participation in workplace pension schemes across the 42 firms increased by a third, from 1.2 million employees to 1.6 million.
The DWP says opt-out rates were higher among those aged 50 and over than for other age groups. It says other factors such as gender, salary, full-time or part-time status and level of employer contributions did not have a clear impact on opt-out numbers.
Pensions minister Steve Webb says: “Seeing our largest employers report such low opt out rates bodes well for this ambitious programme, which will see millions more putting money aside for the future.
“Too few people have been saving for retirement. It is all too often something to be put off, something for tomorrow. These figures show that people really value the chance to save into a workplace pension as they know they will also get money from their employer and the taxman too.”