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Most still in the dark about pension auto-enrolment

  • @simonnread

What's auto-enrolment and how will it affect you? It may sound terribly boring, but it will have a major impact on an estimated 10 million people later this year.

It's a term used to describe government plans to encourage people to put cash into their company pension scheme.

It means that from 1 October, around 10 million workers may be automatically put in a company pension scheme.

Despite this major shake-up, almost 70 per cent of workers have little or no knowledge of the plans, according to an Aviva survey, even though they may soon be saving for retirement for the first time.

Graham Boffey of Aviva said: "The simple fact is that people are not saving enough for their retirement."

But the changes may not have the positive affect the Government hopes as employees can opt-out of the plans. According to the research, 37 per cent of will choose to do so.

"The suggested level of opt-out at more than a third of low earners is worryingly high," said Malcolm McLean of actuaries Barnett Waddingham. "If the opt-out rates are as bad or even worse than these figures suggest, the case for full-scale compulsion will have to be seriously considered."