There has been no significant increase in the number of people opting out of workplace pensions this year, despite rising living costs.
Latest figures from the Department of Work and Pensions show that the trend has been for a slight increase in opt-outs since 2020 – but no significant uptick at all in 2022.
The figures published by the DWP today show that in August this year the proportion of newly enrolled employees who opted out of their workplace pension stood at 10.4 per cent, a modest increase on the 7.6 per cent opt out figure recorded at the start of 2020.
However, over August the proportion of actively-saving employees who stopped their contributions into an AE scheme was just 3.1 per cent – the same level recorded in January 2020.
Experts say that these are encouraging figures, showing that despite increased pressure on people’s take home pay, many are persisting with longer term savings and are not pausing pension contributions.
Broadstone head of pensions and savings Rachel Meadows says: “These latest real-life figures are cause for cautious celebration. While many people still face a tough winter ahead, there is little evidence so far this year of a notable uptick in pension opt-outs.
“We hope that people will recognise the importance of saving for retirement and view opting-out of pension contributions as a last resort.
“Reducing pension savings – even temporarily – can create long-term damage in people’s pension saving potential. While it may provide a small boost to their monthly pay, this may be less than expected and the impact of lost tax relief, employer contributions and compound growth will generate out-sized damage on their overall wealth.”
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