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Recession means more will opt out

The Pensions Policy Institute says the economic downturn is likely to cause more people to opt out of personal accounts than the Government had estimated.

At a B&CE and Social Market Foundation fringe event at the Labour conference in Brighton on Sunday, PPI chairman Matthew Annable said if money is tight more people will opt out than the 33 per cent that the Government has predicted.

He said: “The question we were asked to consider was whether recent events are likely to reduce the effect of auto-enrolment or not. If there is less money to go around, if there is pressure on money, there is likely to be a greater tendency for people to opt out than otherwise.”

But Standard Life head of pensions policy John Lawson believes the Government prediction of 33 per cent is about right.

He says: “I do not think the current economic crisis will have an effect because it is seven years before most of the people who are struggling financially at the moment are going to have to pay any meaningful contribution.”

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