6th September 2013

Scottish Widows: Thrifty, confused or lazy?

Following the introduction of automatic enrolment last October, Government results published recently show that the initiative has been more successful than anticipated.

Last month, the Department for Work and Pensions (DWP) announced fewer than one in 10 workers had opted out of their company scheme between October 2012 and April 2013.

Each year, Scottish Widows surveys over 5,000 people to gauge their views on workplace pensions. Last year, the research showed a predicted opt out rate of 11% - significantly lower than industry estimates of nearer 30%. And now it seems that the reality is even better with this year’s research confirming that out of those who were automatically enrolled only 8% have chosen to opt out.

Although encouraging, such low opt out rates shouldn’t be seen as cause for complacency. It’s important to remember this reflects only the formal opt out process. Information is not yet available on the number of employees who may have cancelled policies once they saw money going out of their pay packet.

Whatever the final figures show though, it’s clear that such a low opt out is a great result: whether that’s down to a genuine desire to save; a lack of understanding of the action required; or just plain laziness on the part of employees. The reason doesn’t really matter. The end result is that more people than ever are starting to take personal financial responsibility by saving for retirement, which can only be positive.

Lynn Graves, Head of New Business Development Corporate Pensions, Scottish Widows

Pensions, Retirement