Impact of auto-enrolment on money compared with 2012.3 Targets set by the Pensions Commission (The Association of British Insurers (ABI), 2022) are being met and there has been an increase in women, lower earners and younger people being enrolled in a pension. Positively, the number of people opting out has been lower than expected, around 1 in 10 people are opting-out within one month of being auto-enrolled.4 - However, while auto-enrolment, combined with the new State Pension, makes sure that many more people than before are making provisions for later life, the Pensions and Lifetime Savings Association (PLSA) argues that contributions at the minimum rate are insufficient to provide an adequate income in retirement, with voluntary pension saving rates above the statutory minimum failing to materialise. Average total contributions made in to defined contribution and auto-enrolment workplace pension schemes are being dwarfed by private defined benefit schemes by a factor of five to one.5 We’re also seeing participation inequalities with savings rates lower for women, ethnic minorities and low earners.6 At an individual level savings rates are still too low for many While auto-enrolment, combined with the new State Pension, makes sure that more people than before are making provisions for later life, the Pensions and Lifetime Savings Association (PLSA) argues that contributions at the minimum rate are insufficient to provide an adequate income in retirement, with voluntary pension saving rates above the statutory minimum failing to materialise. Average total contributions made in to defined contribution and auto-enrolment workplace pension schemes are being dwarfed by private defined benefit schemes by a factor of five to one.5 We’re also seeing participation inequalities with savings rates lower for women, ethnic minorities and low earners.6 - As a result of autoenrolment, there has been an increase in total savings via workplace pensions Total annual savings for eligible savers i creas d to £105.9 billion in 2020. This means there was £28 billion more save into workpl ce pensions in 2020 compared with 2012.3 Targets set by the Pensions Commission are being met and there has been an increase in women, lower earne s and younge people being enrolled in a pension. Positively, the number of people opting out has been lower than expected, around 1 in 10 people are opting-out within one month of being autoenrolled.4 + 10 A decade of auto-enrolment: has it helped or hindered saving psychology?
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