Just under 1 in 10 people eligible for a workplace pension chose to opt out – according to the Department for Work and Pensions in 2018. So we worked to uncover the drivers behind this behaviour and what the final impact of the last increase in contributions in April 2019 could be.
Alongside State Street Global Advisors and Ignition House we worked to understand why people would opt out of a workplace pension or choose to stop saving into one.
The research shows that opting out was merely a timing issue – it hadn’t been the right time to start saving into a workplace pension scheme.
Other aspects identified include:
- There was little evidence that employers were seeking to discourage people from joining the scheme
- Little was done by employers (apart from large employers) to sell the benefits of auto-enrolment savings
- Some had misconceptions of the rules of auto-enrolment, including the perception that they needed to opt in, but reframing and better information led to a ‘lightbulb moment’, for example employer contributions being ‘free money’.