Young workers are leading the way in the Government’s pension savings “revolution”, with people aged under 30 more likely to embrace automatic enrolment than any other age group, figures released by a major retirement scheme show.
Just one in every 20 workers aged between 22 and 29 is choosing to opt out of the Government’s automatic enrolment scheme, compared with a much higher rate of one in four people aged between 60 and 65 who are shunning the initiative, according to data from workplace pension scheme Nest.
Some 95 per cent of 22 to 29-year-olds are opting to remain in the workplace pension they have been placed into by their employer as the scheme rolls out, with just 5 per cent in the age group opting out, according to Nest, which took the research from its 1.5 million members.
Nest found a “generational split”, with the highest opt-out rates taking place among older workers. About 28 per cent of people aged between 60 and 65 are opting out, with 13 per cent of 50 to 59-year-olds choosing to leave their scheme.
This week marks two years since automatic enrolment started, with the scheme kicking off on October 1 2012 amid concerns that people are living for longer but failing to put enough cash aside for their old age.
It has been estimated that one in three children born today will live to see their 100th birthday.
Employees can only decide to opt out of a pension scheme after they have been placed into it.
Nest said its findings suggest a “dramatic shift” in young people’s attitudes towards retirement saving. Before auto enrolment started, a quarter of people under 30 had said they were planning to opt out.
Nest (National Employment Savings Trust) was set up as a not-for-profit option to fill gaps in the existing market.
Its chief executive, Tim Jones, said: “We know that younger workers often think they are too young to start saving in a pension but so far this hasn’t played out.
“Workers under 30 are the most likely to stay in their automatic enrolment scheme, with 95 per cent staying in. These participation figures suggest that the policy is working, and particularly with the younger generations.”