Nearly 1 in 5 workers unaware of auto-enrolment

Nearly one in five (19 per cent) UK workers are unaware of automatic enrolment (AE) into workplace pension schemes, Office for National Statistics (ONS) figures have revealed.

Its Wealth and Assets Survey found that young workers were the least likely to know about AE, with a third (33 per cent) of 22-24 year olds unaware of the policy.

The ONS figures showed that 94 per cent of those aged under 24 that have been auto-enrolled into a workplace scheme have stayed in it.

“While auto-enrolment has been a success in bringing millions more into saving for retirement, the next big challenge is to get people properly engaged much earlier with their pensions,” commented Aegon pensions director, Steven Cameron.

“The latest ONS figures show one third of employees aged 22-24 are unaware of their employer’s obligation to enrol them into a workplace pension scheme.

“However, it’s hugely encouraging to see that 94 per cent of under 24s auto-enrolled have stayed in their workplace scheme, in line with the 95 per cent average across all ages.

“Contributions made at young ages have the longest to grow so can make a real difference to ultimate retirement pots.”

According to Aegon analysis, a 22-year-old auto-enrolled in a workplace pension on minimum wage could have a pension pot worth £106,900 at state pension age.

This is based on 3 per cent earnings growth, 4.25 per cent in future investment growth and an assumed inflation rate of 2 per cent.

“Saving for retirement is not often front of mind for young workers as many will be dealing with immediate priorities such as paying off student debt and saving for a house deposit,” added Cameron.

“There is no silver bullet, but pension providers and employers should look for innovative ways to improvement engagement with their employees.”

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