Auto-enrolment could see 6m extra savers

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Automatic enrolment into pension schemes could create an extra six million people saving, generating £12.5bn annually to the retirement pot by 2017.

The Keep on Nudging report, developed with academics from the University of Edinburgh, was based on a survey of more than 600 employees who represented the ‘squeezed middle’, earning £18,000 to £45,000 a year.

Just under half of them (48 per cent) said they would find it easy to save an extra £50 a month if they had to, the report found.

But it also said communication was crucial to the scheme’s success.

Under the pension reforms, all eligible employees will need to be automatically enrolled into a qualifying workplace pension scheme.

The report found retention rates (the proportion of employees not opting out) could be as high as 82 per cent when information is presented “clearly and effectively”.

It said: “Making carefully designed communication a priority can ensure the success of auto-enrolment.

“By our calculation it will add six million new people saving for retirement, with increased annual retirement savings of £12.5bn annually by 2017 – fully in line with the DWP (Department for Work and Pensions) ambition.”