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Govt slashes auto-enrolment opt-out estimate to 15%

The Government has slashed its estimate of automatic enrolment opt-outs from 30 per cent to just 15 per cent over the lifetime of the reforms.

The Department for Work and Pensions has today published new research setting out the number of people who have actively chosen not to save into a workplace pension scheme since October 2012.

The study found that around 10 per cent of employees have opted out among the UK’s largest firms. In light of this, the Government has drastically reduced its initial “cautious” opt-out estimate for all employers.

Pensions minister Steve Webb says: “Automatic enrolment is proving significantly more successful than previously predicted.  With opt outs remaining low we now expect 9 million people will be newly saving or saving more as a result of our reforms.

“Our reforms to pensions are working and have already proved a success. Now this is an extra million savers who will be helping to secure a better future for themselves and their families.

“Ensuring people can plan for their retirement is crucial to building a stronger economy.”

Nest chief executive Tim Jones says the Government-backed pension scheme’s current opt-out rates stands at 7 per cent.

He says: “If these predictions are correct it’s very promising news for future generations of pensioners, who’ll be better off as a result. A workplace pension is a great helping hand for the future and it’s encouraging to see this message getting through.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Are the currently low opt out rates because employees have been enrolled on 1% & 1% of Qualifying Earnings? what happens in October 17 and October 18 when the ‘cost’ goes up?

    Many mainstream/traditional providers have been avoiding employers enrolling on that basis in case there are opt outs later on and the scheme profitability collapses from their point of view…

    claiming success at this stage is quite easy, the recent budget also helps with opting out decisions from some people, why would you if you can now get the whole fund out in one go…

    non UK nationals/residents who may not ‘retire’ in this country are now far less likely to opt out, this will help with the claims of success of Auto Enrolment…

  2. Non Uk Nationals/Residents make up what % of the workforce? Nothing like a casual bit of racism to help the debate.

  3. In your dreams. Even at the at the low initial rates it will be more than this once the small firms start coming on board. Assuming that they take any notice of it at all.

    Then of course no account is taken of those firms who will let staff go or make them self-employed to cut costs.

    As ever all spin and con.

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