New figures reveal young workers are leading the way in embracing the Government’s pensions revolution – “encouraging news” say auto enrolment experts at ARW Enrol.
The statistics, from the National Employment Savings Trust, reveal that people aged 30 and younger are more likely to participate in automatic enrolment than any other age group.
They show that just one in every 20 workers aged between 22 and 29 is opting out of the workplace pensions programme.
However, there’s a much higher rate among workers aged between 60 and 65 – where the figure leaps to one in four.
It’s now two years since the auto enrolment process began and Alex Wotherspoon, ARW Enrol’s pensions expert, says the latest figures involving younger workers are a positive trend for the pensions industry.
He said: “Evidence that younger generations of workers are embracing the need to save and put enough cash aside for their old age, especially as people are living longer, is encouraging news.
“Traditionally it has been thought that getting young people to think about their life beyond working age was difficult. These figures show a change in attitudes among the younger generations.
“But, there are still concerns that older people are failing to see the benefits that workplace pensions can bring and the fact it is never too late to start saving.
“Before auto enrolment started, a quarter of people younger than 30 had said they were planning to opt out.
“Clearly the work done to raise awareness of the benefits of a workplace pension is starting to pay off among those age groups.”
He added: “What benefits a business is planning ahead to ensure it meets the challenges auto enrolment brings and it meet its staging dates smoothly and without drama.
“The clock is now ticking for smaller companies, which really need to start putting plans in place now to ensure they comply with this legislation. The penalties for not doing so are severe.”
Employers have to automatically enrol workers who are not already in a qualifying workplace pension scheme, are at least 22 years old and below state pension age, earn more than £10,000 a year and ordinarily work in the UK.
Around 4.5 million people have been automatically enrolled so far. An estimated eight to nine million people will eventually be newly saving for their old age or saving more as the workplace pensions programme is fully implemented.
Overall, around nine in 10 people are staying in their pension scheme rather than opting out after they have been automatically enrolled, according to the figures from the National Employment Savings Trust.