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If you are over 50 and working, opt in: Report on auto-enrolment in workplace pension schemes

by on May 29, 2014

A report, funded by Prudential, has been published this week by the Pensions Policy Institute on the effects of automatic enrolment into workplace pension schemes by older workers.

Under automatic enrolment, employers are required to enrol their employees into a qualifying pension scheme. Workers can opt out of saving into a pension scheme, and according to research by the Department for Work and Pensions (DWP), opt out rates for employees aged 50 and over in large organizations are between 25% and 50% higher than those of other age groups.

The main reasons cited by older workers for choosing to opt out were that they had made other provision for their retirement, that they believed they had insufficient time to build up pension savings, and that they perceived the contribution rates as being too low.

Using data from the English Longitudinal Study of Ageing (ELSA), the report finds that the vast majority (over 95%) of this group are likely to receive good value on their
pension contributions from staying automatically enrolled.  Over 95% are expected to see a rate of return on their pension contributions above the benchmark investment
return of 6%, even after the effect of means-tested benefits and taxation has been taken into account.

The Report can be downloaded from links on this page of the PPI website: http://www.pensionspolicyinstitute.org.uk/publications/reports/automatic-enrolment-report-the-benefits-of-automatic-enrolment-and-workplace-pensions-for-older-workers

One Comment
  1. Absolutely, there isn’t much need to opt-out or shun any sort of workplace pension – it all adds up to a nice nestegg at the end.

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