The Department of Work & Pensions’ (DWP) Automatic Enrollment Evaluation Team has released its Automatic Enrollment evaluation report 2015 (available here). The report is produced annually, this year’s edition threw up the following findings.

Auto-enrollment has particularly benefited the low paid and youngest in society most. The largest increase in participation (18 percentage points) came in the group earning between £10,000 and £20,000. The largest increase in participation (in terms of age) was amongst those aged 22 to 29 – increasing by 19 percentage points to 60 per cent in 2014.

Low number of opt-outs but not the full picture.

Up to the end of September 2015, more than 5.47 million workers have been automatically enrolled by over 60,000 employers. Ten per cent of automatically enrolled workers have opted out, with a further 3 per cent of automatically enrolled workers having ceased active membership after their month long window to opt-out has finished.

Savings down

In 2012 the amount saved per eligible saver was £6,370 compared to £4,673 in 2014. Evidence of some firms reducing contribution levels across the workforce to accommodate automatic enrollment.

Automatic Enrolment for smaller employers

Both awareness and understanding of automatic enrollment between small and micro employers is on the increase. The median cost of implementing automatic enrollment was £500 (for those having commenced up to August 2015).

Nathan Long – Head of Corporate Pension Research at Hargreaves Lansdown;

‘Auto-enrollment has boosted pension membership across the board but particularly so amongst the young and low paid who historically were the least likely to join their company pension. Whilst the amount saved has dipped, this will self-correct when the legislation is fully rolled out and minimum contribution levels hit 8 percent in 2018.

Educating staff about the importance of pension saving remains a top priority as illustrated by the 3 percent drop out rate of members after they are in and contributing to their pension. Awareness is increasing amongst small and micro employers, but if even 1 percent of the companies yet to stage don’t comply this is still almost 20,000 employers facing a problem.

Too many people, such as the low paid, part-timers and the self-employed are still being left behind; we are looking to the government to address these outstanding issues of eligibility as soon as possible. It is notable that the government continues to pay no attention to the levels of opt-in, in spite of the fact that over 5 million employees working for companies that have already gone through auto-enrollment are still not members of a pension.’