Under-35s are most likely to opt out of automatic pensions, according to advisers who are afraid this could pour water on plans to improve retirement saving.
By Charlotte
Beugge
The
government's attempts to close the pensions gap with auto-enrolment could be in
vain as a third of people may opt out, according to a survey of corporate
financial advisers by pensions provider Aviva.
Four-fifths
said they expect at least 30% to opt out of auto-enrolment which starts being
rolled out this October. One out of five advisers said they expected 50% of
those offered auto-enrolment to choose to opt out, with only 2% expecting 100%
take up.
Half of
those interviewed said they expected workers aged under 35 to be most likely to
turn away from auto-enrolled pensions, with most (80%) saying they thought this
would be because younger workers couldn't afford to save for a pension.
Other
reasons given for young workers opting out included a lack of trust with
pensions, as well as being too young to worry about retirement.
Aviva's
director of workplace savings Paul Goodwin, says: "Our work with our
customers and advisers indicates that there is already a lot of consideration
being given to planning for auto-enrolment but, at the same time, more thought
still needs to be given to how we engage with employees so that opt outs are
minimised."
Auto-enrolment
will start to be rolled out from October when larger firms will have to start
automatically putting eligible employees into pension schemes unless they
specifically say they don't want to be included.
However,
the scheme won't be fully rolled out across all workers until later in the
decade.
