The Department of Work and Pensions Automatic Enrolment Evaluation Report 2015 makes very interesting reading and gives a fantastic insight into the state of auto enrolment which is due to complete in 2018.
Awareness of auto enrolment
It's great news to see that 88% of employers that have 5 to 49 employees are 'aware' of auto enrolment. However, the number is lower, 77%, amongst employers that have less than 5 employees, known as 'micro employers'. This includes families that employ nannies and individuals that employ carers. Under auto enrolment,these sorts of people are classed as employers so although 77% is lower than the 88% amongst small businesses, it's an impressive figure. This is down to several factors, but much of the credit must go to the DWP and Pension Regulator's advertising campaigns, one featuring former Dragons Den star Theo Paphitis & the latest one featuring a giant hairy monster known as 'Workie'.
Opt-out rate has remained a consistent 10%. Originally the DWP estimated an opt-out rate of over 25%, which means 10% is absolutely fantastic news. The DWP have recently revised their predictions, and have now estimated that by the end of 2018, there will be an opt-out rate of no more than 15%. This low opt-out rate is great news for the government's coffers and will significantly ease the state's financial burden in the years to come.
Amount of money saved
The amount of money being saved into occupational pension schemes has increased annually since the advent of auto enrolment by £2.6 billion to £80.3 billion. However, when you look at the amount saved per individual, there has been a decline. This is probably down to the large increase in savers in private pension schemes due to auto enrolment, saving at the minimum rate of 2%. However, this minimum rate will gradually increase and should eventually see the amount being saved per individual saver increase.
Auto enrolment has played a big part in increasing the numbers of people saving towards their retirement and the amount of money being saved. It's good news that the majority of employers are aware of auto enrolment, but it is important not to get carried away. Just because an employer is aware of auto enrolment doesn't mean they are actively doing anything about it or even understand it, so much still needs to be done.