View more on these topics

Nest dampens concern over auto-enrolment opt-outs

Tim Jones Profile 480 Index

Nest chief executive Tim Jones says early evidence from automatic enrolment suggests opt-out rates could be as low as 10 per cent.

The UK’s largest employers started auto-enrolling employees into a workplace scheme in October.

The reforms are being staged, with medium and small firms due to comply with the new duties between now and 2018.

Speaking at the launch of the ‘Nest Insight’ report last week, Jones said: “There have been a lot of gloomy predictions about opt-out rates but the early indications from those who are auto-enrolling right now suggest about 10 per cent will not participate.

“We will have to see how many people stay in rather than ceasing contributions early on and I accept opt-outs might change as we move towards medium and small companies, but the signs are that auto-enrolment will have a very powerful impact on consumer behaviour.”

Analysis from the Department for Work and Pensions suggests at least 15 per cent of people plan to opt-out of auto-enrolment, while 70 per cent say they will definitely or probably stay in. The remaining 15 per cent are undecided.

Pensions minister Steve Webb said: “We are analysing opt-out rates in the public sector and among private sector employers but it is too early to draw firm conclusions.

“But it is certainly true to say that the early evidence is very, very encouraging.”

The Association of British Insurers warned “doom-mongering” from the pensions industry could have a negative impact on auto-enrolment.

Head of savings, retirement and social care Yvonne Braun said: “It is incumbent on the pension community not to engage in public self-flagellation and doom-mongering, as this will only turn the public off pension saving.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment