Happy 5th birthday to Auto Enrolment. Auto Enrolment is now in its 6th year as it turned 5 this month.
Is it a happy birthday? We say it is; Auto Enrolment should be considered as a pension success story, one of the few in our time. We all should acknowledge the impact Auto Enrolment has had in helping millions of people to kick-start their pensions and savings.
Auto Enrolment statistics, to date, look very good. Since its inception in October 2012, an additional 7.6 million people have been enrolled into workplace pension schemes. There are 63% more workers, that earn between £10k and £20k per year, who are paying into a pension compared with 2012.
Since Auto Enrolment began, over £405 billion has been saved into workplace pensions. £247 billion was from employer contributions, £119 billion was from employee contributions and £39 billion has been from tax relief curiosity of the government.
80% of companies are said to be aware of Auto Enrolment with 75% of all employers supporting the scheme. Opt-outs have been under the anticipated level with less than 10 per cent of automatically enrolled employees choosing to opt out.
On the whole Auto Enrolment has got to age five without scandal and it is heading towards glory! Is it time to relax and let it continue? No. Although auto-enrolment has pushed millions of workers into thinking about pensions and long-term investing, it is only the start of a long journey. Auto Enrolment needs to build on the great start it has made, adapt to the increasing population and changing economy otherwise all the hard work will be wasted. The good news is the government is currently undertaking a review of Auto Enrolment. We need to encourage people, regardless of income or status, to save enough to secure a financially viable retirement.
For once the government has done well, in terms of pensions, and are speaking a lot of sense. You can read more on our Auto Enrolment page. If you require any help or advice with Auto Enrolment, The Financial Management Centre can help. Please find your nearest office here or call head office on 0800 470 4820 or 0333 202 7198.
All statistics are from Pensions and Lifetime Savings Association.