Has Auto enrolment been a success so far?

1 July 2015

Auto enrolment has reached its halfway point. Has it been a success so far? Pensions minister Ros Altmann Yes, according to the government's pensions minister Dr Ros Altmann:

"With auto enrolment we have put in place what has been a hugely successful programme with nearly half of the workers in this country having been automatically enrolled and opt outs very low."

"But we shouldn't be complacent because only around 3% of employers have actually been auto enrolling their staff - the huge, vast majority of employers are still to go."

She's undoubtedly right, as many of those who now have been auto enrolled would have otherwise made no financial provision for their retirement. But despite the project reaching its halfway point, the more difficult part of the project is yet to come, which will be bringing on board the 97% of employers who have yet to go through the auto enrolment process.

The good news is that public awareness of auto enrolment has rocketed according to new figures released by the ONS (Office for National Statistics). In its recent wealth and assets survey, they found that just 8% of people were unaware of workplace pension reforms, compared to 40% three years ago. Good news too is the public's perception of pensions as retirement savings. More people (just under 40%) thought that workplace pensions were a safer investment for retirement than any other, such as property, savings accounts, premium bonds and ISAs.

The general public does not however feel confident that they will have enough money in retirement, with three out of five people questioned saying they weren't confident they would be able to maintain their standard of living in retirement. Hopefully, this figure should reduce over the coming years as more and more people will have a workplace pension through the auto enrolment process, although that alone does not automatically mean they will have enough money for retirement, that will depend upon their expectations and at what level they choose to contribute.

With auto enrolment still ongoing and the government's pension freedoms, it remains an exciting time for pensions.

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