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07 May 2013

Auto-Enrolment Sees Over 300,000 More Workers Saving For Retirement

More than 300,000 British workers have joined workplace pension schemes since July as part of the government´s auto-enrolment scheme, which aims to encourage workers to save for retirement.

New figures from The Pension Regulator (TPR) have revealed that 308,000 people have been automatically enrolled into pension plans with 84 different employers in the period between July 2012 and the end of March 2013. However, the real impact of the reforms may not be known for a few more months until opt-out rates are announced by the Department of Works and Pensions (DWP) in the summer.

Those 84 employers which have started the auto-enrolment process have a combined headcount of 2.149 million workers. Of those, 1.2 million are already saving into a pension plan and about 117,000 are part of schemes outside of the auto-enrolment scheme. The remaining 500,000 employees are either not eligible for the plan because they are too young or too low-paid, This Is Money reported.

The government estimated that up to 11 million workers are eligible for auto-enrollment, as the scheme is set to roll out until 2018 to cover all UK employers. Preliminary estimates by the DWP expect about one in three auto-enrolled employees to use their right to opt out of a plan, while about 70% are predicted to remain within the schemes. However, other sources predict a much higher opt-out rate, reaching about 50% of workers, which might put the government´s plans under threat.

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