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20 Apr 2018

Most savers will stick with auto enrolment pension when contributions rise

Four out of five people with a workplace pension say they will continue to save when auto enrolment contributions rise.

In a survey conducted by NOW: Pensions, 84% of auto-enrolled savers said they will accept the increase and have no plans to opt out of the pension scheme.

Starting this month, minimum contributions will jump from 2% of qualifying earnings to 5%. A further increase in April 2019 will see contributions increase to 8%.

More than 1,500 UK working adults were surveyed for the research. Six in ten (60%) believe it´s important to save into a pension for a more secure future, with nearly a quarter (23%) of the view that their employer contribution is too valuable to lose out on.

The survey also revealed that nearly two thirds (64%) of auto-enrolled savers are aware of the changes to minimum contributions.

However, just under half (48%) of respondents said they wish they had a better understanding of workplace pensions and 51% would have liked the opportunity to save into their workplace pension earlier.

Of those that have chosen to opt out, over a third (38%) did so because they cannot afford to have pension deductions taken from their pay packet each month and a quarter (24%) don´t see the point in saving into their pension because the amount paid into it is too small. Nearly one in five (19%) said they don´t trust pensions.

Troy Clutterbuck, interim chief executive at NOW: Pensions, commented: “Auto enrolment has been a huge success with over a million employers signing up over 9 million employees into a workplace pension since 2012.

“Pension saving is fast becoming the new normal and the vast majority are happy to pay in a little bit more each month, safe in the knowledge their employer will be doing the same.”

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