As the country’s small- to medium-sized enterprises – Umbrella Companies amongst them – gear up for the auto-enrolment staging dates, new research from the National Association of Pension Funds (NAPF) suggests that the scheme may be increasing employee confidence in workplace pensions.
NAPF’s Confidence Index report is a yearly barometer of employee trust in workplace pension schemes, as opposed to other forms of retirement savings. The latest edition reveals that the ratio between those respondents who are confident in pension schemes and those who are not leapt by 15 points this month, rising from -17 in October 2012 to just -2 today.
44% of employees now say they are very or quite confident in pension schemes – the highest proportion since 2010 – while the proportion of those remaining unsure has fallen to 46%.
NAPF’s CEO, Joanne Segars, said: “We knew that auto-enrolment would be a game changer but it would appear it has had a positive impact on confidence in pensions too.”
The challenge now, Ms Segars continued, is to ensure that opt-out rates stay low, encourage further confidence in pensions, and expand the pool of people saving for retirement.
Interestingly, the study found that employees who have already been auto-enrolled or who are already in workplace pensions were substantially more confident about pensions than those who are not: 59% of the former rated pensions positively, while only 28% of the latter expressed confidence.
Last October, when auto-enrolment began, only 50% of existing pension scheme savers expressed confidence. Since then, 1.6 million people have so far been auto-enrolled in a workplace pension scheme.