Auto-enrolment is “one of the most successful policy interventions of the 21st century so far” it has been claimed following research published today.

Responding to the Institute for Fiscal Studies’ report on auto-enrolment, the pensions industry has been quick to comment the success of the initiative since 2012.

Hargreaves Lansdown head of retirement policy Tom McPhail said: “Auto-enrolment is proving to be one of the most successful policy interventions of the 21st century so far. It has already increased the number of people saving for retirement by 6.7 million and is projected to eventually boost annual savings by £15 billion a year; this is powerful stuff.”

The Pensions Regulator also celebrated auto-enrolment’s success to date. TPR executive director of automatic enrolment Charles Counsell, said: “This research demonstrates the real change that automatic enrolment has brought to the savings landscape.

“The research shows that the majority of private sector staff are now members of a workplace pension scheme compared to just half before automatic enrolment – and that one of the biggest increases in membership is among workers in their 20s. This demonstrates the great strides automatic enrolment has made in making workplace savings the norm.”

The rise in pension scheme membership among employees in their twenties was also noted by MRM consultant Sophie Robson. "The IFS research shows how auto-enrolment is broadly moving in the right direction, with opt-out rates low. In fact, in terms of rates of participation, it has been a huge success, with levels on an upward trajectory for the first time in decades and pension coverage among the 22-29 age bracket increasing,” she said.

However, Robson did highlight the fact that saving levels among this age group is limited, (generally a result of their lower income).

“We shouldn’t forget that with overall contributions among this age group still low at around 2%, more needs to be done to warn them that the money they put away via auto-enrolment is just the tip of the iceberg of what they will actually need to fund the retirement of their dreams” Robson explained.

Nonetheless, while the industry praise the reform’s successes, the initiative is not yet complete and the momentum will need to be upheld to ensure as many people as possible are enrolled.

Commenting on the next step in encouraging more people to enrol, McPhail commented: “There are nearly 5 million self-employed workers in the UK who get no benefit from auto-enrolment. The government should look at introducing a solution to help them, based on the tax system.”

In addition to this Bravura Solutions retirement expert Natanje Holt emphasised: “While this particular initiative has worked well, there are concerns about the overall pensions structure: it is still too complicated. Many people will be juggling contributions from auto-enrolment with various other savings and pension schemes, and that’s before we factor in the state pension.”

McPhail concluded: “There is still a huge amount more to be done and next year’s review by the DWP will set the agenda for the next phase. If we don’t keep moving forwards with the reforms, there is a risk that much of this initial good work could yet be wasted.”

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