Auto Enrolment Set to Arrest Pension Savings Slump
27 July 2012 (PLANSPONSOREurope.com) – Automatic enrolment will reverse the slump in pension saving, with around half of UK plan sponsors with no pension provision choosing NEST for their workers, according to Pensions Minister Steve Webb.
Webb comments come as new official research reveals a drop of 15 per cent in employees’ pension saving.
Just one in four private sector employees are active members of their employers’ pension scheme in the UK today down from a third in 2007 (31 per cent), representing a 15% drop in employees’ pension saving overall.
Meanwhile 31% of private sector organisations currently offer any pension provision for their staff, down from 41% in 2007.
Almost half (45%) of firms without a current workplace scheme intend to enrol all their employees into NEST, the National Employment Savings Trust. A further 11% say they will set up their own scheme, while five per cent say they will use a combination of both.
Webb said: "Automatic enrolment into workplace pensions will start the monumental shift we need to get millions more people in Britain saving for their retirement.
"It’s a major change for business too, especially for firms that don’t currently offer pension schemes for staff and it is good news that so many say they will use NEST.
"NEST is designed around the needs of people who are new to pension saving, with low charges, costs and easy to use services. We expect around half of all new savers to be NEST members, including many low-paid and part-time workers, women and young people, who will get a contribution from their employer for the first time."