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Impact on cash cuts support for compulsion

Public support in principle for pension compulsion falls away when the impact on wages is realised, according to research by the ABI.

It says that opinion polls consistently show that 70 per cent would support compulsion but the ABI survey reveals that only one in four people want compulsion to affect them personally.

The research also shows that the 4.5 million working adults who are most at risk of having insufficient income in retirement oppose compulsion.

Opposition to compulsion rises from 14 per cent to 21 per cent cent once workers are made aware of the possible effects on their wages.

Support for compulsion is greatest among people who have private pension provision, with 82 per cent of those in defined-benefit schemes and 80 per cent of those in employer-sponsored defined-contribution schemes support compulsion.

Forty-two per cent would support compulsion which is at or below their current level of contribution, with 70 per cent of this group made up of high-earners with salaries over £40,000 a year. Forty-six per cent who support compulsion but have no pension savings are aged 18 to 29.

Head of pensions and savings Joanne Segars says: “This research shows that the argument for comp-ulsion in pension saving is not as black and white as it first appears.

“Once people understand the implications of compulsion and realise that compulsion has to be paid for and is not simply &#39free money&#39, the arguments bec-ome less clear cut. Even supporters of compulsion tend to shy away from the suggestion that they should contribute more than they do at present.”


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