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Savers to stand by auto-enrolment as rate hikes kick in

More than four in five auto-enrolled savers will carry on saving after auto-enrolment contributions increase today according to research from Now Pensions.

The study shows 64 per cent of auto-enrolled savers are aware minimum contributions have jumped from 2 per cent of qualifying earnings to 5 per cent.

Roughly two-thirds of those surveyed say they are paying the minimum 2 per cent contribution and 60 per cent believe it is important to save into a pension for a more secure future.

However 48 per cent of respondents say they wish they had better understanding of workplace pensions and half would have liked the opportunity to save into their workplace pension earlier.

It is estimated 5.6 million of the nine million people who have been enrolled will be affected by the increase.

Now Pensions interim chief executive Troy Clutterbuck says: “Auto enrolment has been a huge success with over a million employers signing up over nine million employees into a workplace pension since 2012.

“Pension saving is fast becoming the new normal and the vast majority are happy to pay in a little bit more each month, safe in the knowledge their employer will be doing the same.”

Fidelity International head of pensions product Carolyn Jones adds the case for savers to continue making their contributions is vital.

“As consumers see contributions into their pensions rise and their take home wage decrease, we must continue to make the case for why opting out is not in their best interests.

“But it’s not enough to just tell people and waggle your finger at everybody. Opting out come April 2018 will see a loss of valuable employer contributions that, quite simply, cannot be found elsewhere.

“Any short term saving cost now will pale in comparison to the valuable benefits you could have had later.”

Opinium conducted the research on 1,552 UK working adults including men aged 22-65 and women aged 22-63 who have a pre-tax personal income of over £10,000.


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