But the real surprise was how the proposed changes have gone down with younger people, who seem to be significantly more engaged following the reforms. Two fifths (40 per cent) of 22-30 year olds say they’ll start to think about what to do with their retirement income sooner thanks to the new options open to them at retirement and a significant proportion (36 per cent) also say they’re more likely to increase payments into their pension as a result. This suggests younger workers may be more proactive than the average.
Tim Jones, CEO, NEST Corporation says:
“It is hugely positive to see that pensions are becoming embedded as a national priority. Until recently, millions of people were not saving for retirement. Auto enrolment and now the new pension freedoms have changed all this – reform is leading to a pension revolution. Five million more people are now saving for their future and support for auto enrolment continues to grow, even among those who have so far opted out. It shows just how far we have come. Saving for later life is fast becoming the ‘new normal’ which is fantastic news.” Understanding about what the pension reforms mean is still patchy, however. Just over half (52 per cent) of survey respondents were unaware they had happened and more than a fifth (22 per cent) admitted they still do not know what they would be most likely to do with their pot when they come to retire. Of those who did know what they might do, most people (32 per cent) wanted some form of flexibility, with the rest mostly split between preferring a drawdown type product (19 per cent) or something that resembled an annuity (16 per cent).
NEST insight 2015 is available to download through the CIPP news link below. See page 55 for the CIPP’s contribution.
NEST insight 2015
About NEST insight NEST insight is NEST’s annual snapshot of the auto enrolment landscape. It looks at the behaviours and attitudes of members enrolled into workplace pensions and the experiences of employers who have set up schemes to comply with the new duties. It also looks ahead to consider the workers who’ll be enrolled in the coming years and the employers yet to reach their staging date. Views are based on feedback gathered over the year from NEST customers, and quantitative and qualitative research among consumers, employers and intermediaries. They have also looked at research conducted by The Pensions Regulator, the Department for Work and Pensions and trade bodies, consumer groups, the pension provider community and other government departments.
NEST: removal of the annual contribution limit and transfer restrictions
27 January 2015
Draft legislation has been published to remove the annual contribution limit and the transfer restrictions on NEST.
The National Employment Savings Trust (NEST) was set up alongside the introduction of automatic enrolment to be a pension provider which any employer would be able to use for any worker. To prevent NEST from having an unfair advantage over commercial pension providers that do not have government backing, various constraints were placed upon it including an annual contribution limit and transfer restrictions.
CIPP Policy News Journal
08/04/2015, Page 443 of 521
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