New data has revealed that pension auto-enrolment opt-out rates remained low, at 10%, in the 12 months ended 31 March 2021.
Nest Insight has published Retirement saving in the UK 2021, an annual study of retirement saving behaviours in the UK, which included around a third of the working population and also surveyed Nest employers and members. It found that cessation rates have also remained low over the life of the scheme, at just 2%.
A total of 85% of employers contributed the minimum 3% of qualifying earnings to their workers’ retirement savings and 89% of members contributed 5% of qualifying earnings to their pot.
Only one in three members said they expect to retire at their state pension age, with 44% of those aged 40 and older and 55% of those aged 60 and older expecting to delay their retirement. Two-fifths (40%) of members aged 60 and older said they would continue working after retiring because they do not feel ready to stop working and so they could afford essential items.
The research also highlighted that while staff tend to be working longer, many are not working in the same way during their later years, as 18% of members aged 60 and older are working for their employer part-time, 26% of women aged 60 and older and 12% of men aged 60 and older are working part-time.
Richard Notley, senior analyst at Nest Insight, commented that many of the workers that have been brought into pension saving through auto-enrolment are younger and lower-paid workers, deeming them to be most in need of access.
“As the new generation of savers continue along their savings journey, it will be essential to understand and address the challenges they may face in achieving a financially secure retirement, and identify and test solutions that may help them get there, from approaches to increase pension engagement, to tools designed to improve their short-term financial resilience and help them arrive at retirement in an overall financially healthy position,” he said.