Pensions - Articles - ONS stats on AE show positive progress

 This update does not reflect actual experience in terms of opt-outs, assuming a 10% opt-out rate but paints a positive picture that automatic enrolment will have on retirement saving for millions of UK workers. In particular it predicts an additional £17 billion of pension saving by 2019/20 with 10 million people newly saving or saving more by 2018.

 However, the statistics do also confirm that not all are getting the benefit of automatic enrolment. In particular, 19% are not eligible because they don’t earn more than the threshold but this rises to 31% for women. While half of these are eligible to opt-in, it shows how automatic enrolment is failing those on low incomes, many of whom are women.

 Richard Parkin, Head of Pensions Policy at Fidelity said: “There is much to celebrate in these statistics. Huge numbers of people will start saving for retirement for the first time under automatic enrolment. But it highlights again that people are being left behind. Young people and those on low incomes are not eligible for automatic enrolment with the impact of the salary limit most acutely felt by women where over a third are excluded. While some have the right to opt-in, we know that it is the inertia effect that gets people saving and keeps them saving.

 “In its forthcoming review of automatic enrolment government needs to look at ways of bringing these people into the system. We cannot afford to leave those on low incomes further behind and excluding younger workers misses a great opportunity to establish the savings habit from the start of their working lives.”