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UK Insights

Auto enrolment pension success

Andrew Curry

Director

Public Opinion Policy 30.09.2013 / 00:00


Kantar
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How a new consumer realism has resulted in remarkably low opt-out rates for auto enrolment pensions

One year on from the introduction of law to ensure workers are automatically enrolled into a workplace pension scheme, the government's plans to get us saving for retirement seem to be working. New research from NEST and Kantar's The Futures Company has found the power of inertia and low contribution rates have driven a remarkably low opt-out rate from automatic enrolment pension schemes (around 9% of the 1.4 million enrolled so far have opted out).

While many people are still feeling the pinch, there has been a shift in consumer attitudes to money, debt and saving that runs with, rather than against, the grain of automatic enrolment.

58% of people agree that this recession has 'changed global consumer culture for ever'. 48% of people agree they've become better at managing their finances since the recession. And 57% of people agree they'll never spend money as freely as they did before the recession, up from 48 per cent in 2012 and 43 per cent in 2010.

While this new consumer mood may not be the primary factor driving the low opt-out rate, we don't believe that economically tougher times mean people will abandon planning for the future. Indeed the reverse seems to be true.

The trends identified by The Futures Company suggest many people will strive to stick with saving, even if it means greater sacrifices elsewhere. But this places an even greater responsibility on the pensions industry as a whole to be open and transparent with savers. While consumers see more value in saving, research suggests that they will also need reassurance that their money is being carefully and responsibly looked after.

Download the full report from NEST and The Futures Company below, or read more about The Futures Company Consumer Outlook 2013.

Source : Kantar Futures


Editor's Notes

The Futures Company Consumer Outlook is a nationally representative online survey conducted regularly in the United Kingdom and Republic Of Ireland between 2008 and 2013 (UK n= c.1,000 each year). The analysis in this report draws on seven detailed examinations of the impact of the financial crisis on consumers' outlook and behaviour throughout the survey period.

NEST has conducted two waves of a consumer survey among the 70 percent of workers who are eligible for automatic enrolment and are not currently in a qualifying scheme. The research surveyed representative samples of 1,847 jobholders. Research was undertaken in November 2011 and March 2013.

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