Employee views on auto enrolment.

RESEARCH SHOWS OLDER EMPLOYEES ARE MORE LIKELY TO OPT OUT OF AUTO ENROLMENT.

We’ve recently revealed the findings of new research into how employees will deal with the auto enrolment process.

The qualitative research, which used face-to-face interviews, was completed in May.

• Respondents were aged between 22 and 50+
• Earning over £7,000 per annum
• Not yet enrolled into a company pension scheme.

The research shows that awareness of auto enrolment is low but is viewed as a significant change. Employees expect their employer to:

• Provide them with the information they need at the appropriate time
• Provide guidance and a workplace website or intranet that will assist employees in their decision making and helping them through the auto enrolment process.

Operations Director of Workplace Savings, Ian Mahoney commented: “Our research shows that there is a significant level of trust among employees that their employer will guide them through what they clearly believe is an important change. This places a heavy responsibility on companies of all sizes to make sure they deliver effective communications when implementing auto enrolment. As well as traditional methods of communication such as letters to individuals, employees will expect to be able to go online for information that will help with their decision process. They also expect to communicate that decision through the company’s website.”

Employees appear to prefer using websites for the ‘remain in/opt out’ decision process because they expect to receive instant acknowledgment that their decision has been registered. Telephone and post, though still important for some, appear less popular.

Many of the respondents without a pension viewed auto enrolment as a much needed ‘nudge’ to start saving. Interestingly they are concerned that they lack knowledge and will need guidance about choices, especially around how to invest in their pension.

Ian added: “The research found that the youngest age group, those between 22 and 30, would be the hardest to engage with on pensions and may be most likely to opt out. Older staff, aged 30 to 40 years, who are not yet a member of the company scheme are likely to be nudged into an ‘opt in’ decision. Worryingly the respondents in the oldest age group, the 50s and 60s, said they would be more likely to opt out and rely on the state pension.”