More than two thirds of teens want automatic pension saving

For immediate release: 18 December 2017

The 2017 auto enrolment review published today confirmed that automatic enrolment will be extended to 18 years olds by 2020. Currently, legislation only requires employers to automatically enrol those aged over 22, earning more than £10,000 a year or £192 a week.

A survey*of 500 16-21 year olds conducted by NOW: Pensions reveals two thirds (66%) are not currently contributing to a pension. Despite this, 69% think being auto enrolled by their employer into a workplace pension before the age of 22 is a good idea to help them save for their retirement. This rises slightly to 70% amongst 18-21 year olds.

Of those surveyed, 64% say if they were auto enrolled they would remain in the scheme and wouldn’t opt out. This rises slightly to 66% amongst 18-21 year olds.

For over a third (38%), the main reason they would stay in is because they recognise the benefits of saving from a young age. Those that would opt out (36%) would do so in the most part because they believe wouldn’t be able to afford it (12%).

Adrian Boulding, Director of Policy at NOW: Pensions said: “Extending auto enrolment to 18 year olds is a complete no-brainer. Young people want to do the right thing and save for their future and auto enrolment would make it easy.  

“The bottom line is, the sooner you start saving, the easier it is to build a decent sized pension pot as not only are you contributing for longer but your money has longer to grow.”

Low awareness of auto enrolment

These findings come despite the fact that awareness of auto enrolment amongst this age group is currently low with over half (55%) of 16 to 21 year olds unaware of auto enrolment. This increases amongst 16 and 17 year olds of whom two thirds (68%) had not heard of the legislation.

Teen earnings

Over two fifths (45%) of 18 – 21 year olds surveyed say they currently earn over £10,000 a year or have weekly earnings over £192 whereas only 18% of 16 and 17 year olds earn a similar amount.

 

This corresponds with data from the Office for National Statistics which shows that around 1.1 million 18-21 year olds have annual earnings over £10,000 so that would qualify to be auto enrolled under the current rules compared with just 100,000 16 and 17 year olds.

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Notes to editors

*Research conducted online by Opinium with 500 18-21 year olds between 6-8 December 2017.

 

For further information:

Amy Mankelow / Cheriton Lee

NOW: Pensions

Tel: 0203 948 9234 / 0203 948 9236

amy.mankelow@nowpensions.com / cheriton.lee@nowpensions.com

 

Irene Kyme

Cicero Group

Tel: 0207 343 1600

irene.kyme@cicero-group.com

 

Notes to editors

NOW: Pensions www.nowpensions.com @nowpensions

NOW: Pensions is one of the UK’s largest workplace pension providers with over a million members and tens of thousands of employers from a wide range of sectors. A company wholly owned by Danish pension scheme ATP; one of Europe’s largest pension funds. NOW: Pensions entered the UK market in 2011 with a simple and cost effective workplace pension designed specifically with the auto enrolment market in mind.

There is a need for a member-centric solution designed for ease of use with low costs and cutting edge investment strategy, which delivers long term stable returns. ATP's in-house investment capabilities, combined with our novel and innovative… — Lars Rohde, Governor of the National Bank of Denmark and Former CEO of ATP Group
NOW: Pensions was attractive to us because the staff were very helpful and they sent over all the information required. This made the decision easy. — Metro Surveillance Group Ltd
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Our broker recommended NOW: Pensions, as they believed it would be our best option. We have not been disappointed, the NOW: Pensions customer support teams are great and always available. — Bromborough Paint & Building Supplies Ltd
I am backing NOW: Pensions, the ATP project, because I believe it will encourage transparency, low costs and decent returns for millions of British employees. — Nigel Waterson, former Shadow Pensions Minister