Consumers will ‘stop worrying’ about retirement after auto-enrolment
Data from the National Employment Savings Trust (NEST) found 63% of people agree with auto-enrolment, despite finding the current economic environment difficult.
NEST insight, launched today, also found 67% of people thought auto-enrolment would mean they could ‘stop worrying that had had done nothing about their retirement funds’.
However, with minimum levels of saving set at 8% of qualifying earnings commentators said these people would not achieve desirable pensions.
Hargreaves Lansdown head of pensions research Tom McPhail said: “The problem here is that for most people, the default auto-enrolment contributions will almost certainly not deliver a pension which will meet their expectations.
“For example, a 35-year-old earning £30,000 a year would probably have to save an additional £316 a month on top of their statutory minimum contributions to hit a target pension of two thirds of their pre-retirement earnings.”
The report also found employers were not giving themselves enough time to prepare for their duties.
It said under half of employers with fewer than 5,000 workers have confirmed their provider.
Tim Jones, NEST chief executive said: “Automatic enrolment represents a massive opportunity to improve pension participation as pensions go mainstream from this year, and our research tells us that this is what most consumers want. Despite the economic challenges, the time is right for automatic enrolment.”