The Legal & General Workplace Savings report finds that people in their 50s and 60s and those in their 20s are most likely to opt out of the upcoming auto-enrolment pension scheme.
The report says employees in the 22 to 30 years of age group will be the hardest to engage with on pensions and are most likely to opt out. Staffs in the 30 to 40 years age group may be nudged into an ‘opt in’ decision if they are not members of their employer’s pension scheme. However, employees in the oldest age group, the 50s and 60s, are likely to ‘opt out’ of the soon to-be rolled out auto-enrolment scheme and rely on state pensions for retirement income, the survey found.
The research said awareness for the scheme is currently low and employees believed that their employers will provide them with the required information at an appropriate time. However, employees expect to receive guidance on the benefits of auto-enrolment and hope to find crucial information on their workplace website for both decision making and the enrolment process.
“Our research shows that there is a significant level of trust among employees that their employer will guide them through what they clearly believe is an important change. This places a heavy responsibility on companies of all sizes to make sure they deliver effective communications when implementing auto enrolment. As well as traditional methods of communication such as letters to individuals, employees will expect to be able to go online for information that will help with their decision process. They also expect to communicate that decision through the company’s website,” said Ian Mahoney, Workplace Savings operations director at Legal & General.
The survey also found websites are the preferred medium for ‘remain in/opt out’ decision, since employees expect immediate acknowledgement that their choice has been registered. Telephone and post were found less popular than web service.
A significant number of employees with retirement savings said auto-enrolment is the much needed ‘nudge’ to start saving. They however, acknowledged that they lack knowledge on retirement savings and would require guidance on investments and choices available in the market.