Pensions - Articles - AE too successful a nudge to boost pension savings


Kate Smith, Head of Pensions, Aegon comments on the Institute of Fiscal Studies paper ‘Auto-enrolment – too successful a nudge to boost pension saving’, which suggests that the financially vulnerable should opt out of their workplace pension.

 Kate Smith, Head of Pensions, Aegon comments: “Auto-enrolment has been incredibly successful in getting more people saving in a workplace pension. All employees meeting the auto-enrolment criteria are auto-enrolled into their employer’s workspace pension and they can opt out if they wish. Those on the lowest incomes, which will include many of the UK’s financially vulnerable, are already excluded from auto-enrolment as they don’t earn at least £10,000 a year in a single job. Others are further protected from ‘over paying’ as the first £6,240 (2020/21) isn’t pensionable which means they pay lower contributions. In addition, being furloughed will have taken many of the financially vulnerable below the £10,000 earnings trigger.

 Opting out of pension saving is a short term answer which could create longer term problems. The employer contribution plus tax relief doubles the employee’s contribution. Opting out will probably lead to the immediate loss of their employer’s valuable pension contribution. Due to inertia people are unlikely to opt back in again until they are re-enrolled back in their workplace scheme, which could be three years away. For some it may be difficult to make up those missing years. The earlier people save in a pension the longer it has to grow. “
  

 Auto-enrolment – too successful a nudge to boost pension saving

Back to Index


Similar News to this Story

Face the fear this Halloween
One in ten (10%) are too scared to check their pension. Nearly half (47%) believe their retirement finances are influenced by forces beyond their cont
Almost a million retirees miss out on vital Pension Credit
DWP data on Pension Credit take up reveals that up to one million pensioner families could be losing out on an average of £2,600 a year in Pension Cre
HMRC pension overtaxation claims hit landmark £1.5 billion
Brits reclaimed £48.5 million in overtaxation on pension withdrawals in July, August and September 2025, the latest HMRC figures reveal. Over 13,700 r

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.