Nearly a quarter of workers could opt out of their scheme when minimum contributions hit 8 per cent, according to new research.
A survey for Now: Pensions found 24 per cent of employees “definitely will” or “might” opt out, when minimum contributions hit 8 of qualifying earnings in 2019. But 74 per cent of those that intend to opt out when contributions rise to 8 per cent say they would either “definitely” or “probably” continue to save into their workplace pension if contributions were reversed so that and employers put in a minimum of 5 per cent and employees make a 3 per cent contribution.
Two thirds – 66 per cent of those surveyed believe that the total auto enrolment minimum contribution of 8 per cent is adequate, with 21 per cent believing it should be increased.
Now: Pensions CEO Morten Nilsson says: “At the moment the message is strong and clear – you pay in and your employer matches it.
“But, as contributions increase, employees will find themselves paying in more than their employer and this inequality could drive opt outs.
“With the 2017 review of auto enrolment just around the corner, the government should consider rebalancing contributions for a more equitable split to encourage a greater proportion to continue to save.
“Losing savers at this stage could be damaging and have long term consequences for the success of the policy.”