Approximately nine million people will save for the first time, or save an increasing amount, following workplace pension reforms (automatic enrolment).
The predicted number of new savers and those likely to save more, made by the Department for Work and Pensions (DWP), is one million higher than a previous forecast.
Recent evidence regarding the numbers opting out of automatic enrolment has led the DWP to reduce its estimate of those who will opt out of the new scheme from 30% to 15%, over the programme’s lifetime, hence the increase in the number of predicted new savers.
DWP research also indicates that the opt-out rate at the largest firms is lower, typically standing at around 9-10%.
Minister for Pensions Steve Webb stated that automatic enrolment is proving significantly more successful than previously expected, and that new savers, and those saving more, would help to secure a better future for themselves and their families.
According to statistics from The Pensions Regulator, over three million people have been enrolled into a pension, and almost 11,000 employers have registed.
In response to the Government halving its forecast of those opting out of automatic enrolment from 30% to 15%, NEST Chief Executive Officer Tim Jones said that, if the new predictions proved accurate, it would be very good news for future generations of pensioners, who will enjoy increased prosperity.
Jones described a workplace pension as a great helping hand for the future, adding that it was encouraging that this message appeared to be getting through.