Nine out of ten employees automatically enrolled into a workplace pension are choosing to remain in the scheme, latest figures suggest.
After gathering data from the country’s 50 largest employers, the Department for Work and Pensions (DWP) has revealed that the average auto-enrolment opt-out rate is just 10%.
The Government had predicted that around 25% of individuals automatically enrolled into a pension would choose to leave the scheme.
‘Seeing our largest employers report such low opt-out rates bodes well for this ambitious programme, which will see millions more putting money aside for the future,’ commented the pensions minister, Steve Webb.
While experts have welcomed the news, many say that a ‘pensions crunch’ will come when more than 29,000 medium-sized firms begin auto-enrolment in early 2014.
Pension auto-enrolment began last October and is being phased in over a number years, starting with the largest employers.
Each employer will be allocated a ‘staging date’ from when their duties will begin. The staging date is based on the number of people in the employer’s PAYE scheme.
Employers with 120,000 or more personnel in their PAYE scheme were required to begin enrolling staff from 1 October 2012. By February 2014 all employers with 250 or more staff will be within the scheme’s scope.
Meanwhile, businesses with 50-249 staff will have a staging date between April 2014 and April 2015, and firms with fewer than 50 workers will commence auto-enrolment between June 2015 and April 2017.
Last month the Pensions Regulator revealed that more than one million people have now been automatically enrolled into a workplace pension.