84% staying auto-enrolled | moneyfacts.co.uk
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Lieke Braadbaart

Online Writer
Published: 06/04/2018

Today marks not just the start of a new tax year, and all the changes that entails, but also the first increase in automatic enrolment contributions, which will see 5.6 million auto-enrolled savers experience a jump in their workplace pension contributions. Despite the increase, 84% will continue to opt in and save more towards their retirement.

This is according to research by NOW: Pensions, which has looked into today's change that will see contributions rise from 2% to 5% of qualifying earnings, including an increased 2% employer contribution. This means that someone earning £10,000 (the minimum for auto-enrolment) will see at least an additional £78 per year of their pay go towards their pension, as well as a bonus of £38 (which results in an extra £79) from their employer.

Figures from the Institute for Fiscal Studies further show that the largest increase will be felt by those currently earning £46,400 or more, as they will make an additional employee contribution of £818 per year (resulting in a total of £1,210 added to their pension). Their employers will be paying an additional £415 per year, resulting in an extra £806 towards their retirement.

Given these numbers, it's not surprising to find that 23% view their employer contributions as too valuable to lose by opting out of their workplace pension. Additionally, NOW: Pensions data shows that 60% believe that it's important to save into a pension for a more secure future.

Perhaps because of this, 48% of respondents wish they had a better understanding of workplace pensions, while 51% wish they'd been able to start saving into their workplace pension earlier. With 64% aware of the current changes, there's still a clear need for more widespread knowledge.

Of those people that have opted out of their workplace pension, 38% did so because they can't afford the pay deduction, while 24% don't see the point and 19% don't trust pensions. These people would be wise to at least consider another option, as the State Pension on its own is unlikely to make for a comfortable retirement.

What next?

Read up on auto-enrolment here

Still confused about your options? Why not have a look at our retirement guides

As an alternative to saving in a pension, consider the Lifetime ISA, which can offer a 25% Government bonus


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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