A newly published report reveals that the opt-out rate for auto-enrolled workplace pensions has been much lower than expected since they were introduced.
The study, compiled by the National Employment Savings Trust, shows that 1.4 million people were auto-enrolled during the first year of the scheme.
Of those, fewer than one in ten – just 9% overall – have opted out since being auto-enrolled, and in many cases their reasons for doing so make good sense.
For 14%, retirement is already on the horizon, so investing into a workplace pension would not yield the usual long-term benefits, while 15% have made private arrangements to fund their retirement elsewhere.
A third of opt-outers, however, chose to do so due to short-term affordability concerns, putting them in the worrying position of risking their long-term financial stability in order to cover short-term spending.
In contrast to this, it would appear that the long-term benefits are partly responsible for why more people are choosing to remain opted-in than was initially anticipated.
NEST chief executive officer Tim Jones said: “Although it can be a struggle to find a few extra pounds each month, the money from employer contributions and relief at finally doing something has convinced more people to stick with saving than we ever expected in this economic climate.”
The figures come as part of a broader report, which claims that British habits surrounding money have been “fundamentally changed” by the recent economic turbulence.
Both day-to-day and long-term financial plans have been affected, according to the survey, which singles out the pensions statistics as being among the most significant of its findings.