Enrolment pushes up pension optimism

EMPLOYEES who have been automatically enrolled in a workplace pension scheme have seen their confidence boosted in the past year, according to a report out today.

The National Association of Pension Funds (NAPF) reveals that in the past 12 months, during which time 1.6m people have been enrolled automatically in an occupational pension scheme, confidence has reached the highest level seen for three years.

Currently, 59 per cent of people who were already saving in a pension scheme, or who have been automatically enrolled, say they are confident about their pension, eight percentage points higher than the equivalent last year.

According to the NAPF, the number of people who are join a pension scheme organised by their employer automatically will rise as high as 10m by 2018. So far only the largest employers are obligated to enrol their staff.

The NAPF’s chief executive, Joanne Segars, commented: “We knew that automatic enrolment would be a game changer but it would appear that it has had a positive impact on confidence in pensions, too, which is very welcome news indeed.”

Much of the increase in pension scheme membership has come from younger workers, with the proportion of people aged 18-44 in a scheme rising from 41 per cent in 2012 to 48 per cent this year

Despite the positive revelations, nearly three quarters of people, 72 per cent, responding to the NAPF’s survey said that the state pension will not be enough for them to live on in retirement, and 64 per cent expect that they will have to continue working after they reach pensionable age so that they can live comfortably in their old age.