Auto-enrollment: It’s about time

Financial Services Team Blog

Farzana Qadir

Research by the Pensions Policy Institute claims that around half of over 50’s will have to work longer in order to ensure they save enough to fund an adequate pension income in retirement.

This has opened my eyes further, to a part of my future, I previously hadn’t really given much thought to.  With only 33%[1] of those working within the private sector contributing to a company pension scheme, I don’t think I’m in the minority.

Starting work just out of university, retirement seemed too far away in the future to think about.  I was more concerned with receiving my pay each month, a luxury when you’re a student. Moving through the years, the aim of starting a pension was always there, but for one reason or another always got left on the back burner.

I eventually joined a pension at a time which I thought would still give me enough in my retirement to fund my living expenses. However, from what I have heard from various focus groups I have viewed and news articles I have read, pension pot funds are rapidly decreasing, with many not receiving the payout they were expecting.  Admittedly, this has left me feeling a little concerned and scared to even check how much my pension has amassed to.

With companies now gearing up for compliance to legislation around pension reforms, including having to automatically enrol employees into a group pension scheme.  Will this give people like me a better chance for saving enough for retirement, especially with life expectancy on the increase? I definitely think so.  This is a step in the right direction, as ultimately the individual will benefit, with one of the advantages being the employer contributions.

Starting your career fresh out of university, I think a little bit more guidance is required to put things into perspective and for people to think ahead in terms of saving for the future, whether that be through a pension, property or other type of investments.

Auto-enrolment does just that. I think the industry just needs to create more confidence that the money being invested is safe, and despite the advantages of auto-enrolment, this will be a major hurdle to overcome.  Is there potential for the government/industry to explore alternative savings vehicles into which employer contributions could be made? Investments that could potentially be more secure? I guess we’ll just have to wait and see.

Unfortunately in the mean time, for those who have failed to put in place adequate provisions in their younger years, the option of working for longer seems the most likely.

For further information on the Pensions reforms and auto-enrolment, please visit the Pensions Regulator website –