Talking Head: Millions more savers are part of workplace pension schemes thanks to auto-enrolment, but there is no room for complacency, says Nest chief Tim Jones.
Having enrolled millions of employees into workplace schemes, auto-enrolment is still a huge prize not yet in the bag.
Change has featured on the industry’s menu for a while now.
Retirement patterns are in flux. People are living and working longer, and retirement is now a road to be travelled rather than a destination people arrive at suddenly.
Likewise, the future of pensions has been altered considerably by the new freedoms. We are currently digesting what these mean for Nest’s members via our consultation on the future of retirement.
These small and micro employers are particularly important. Unlike their larger cousins, just two in 10 have an active pension scheme in place
More broadly it may take some time for the industry as a whole to really know how people will react to the choices on offer and how best to respond.
Change may not be off the menu for some time, if ever. Big questions remain, from what to do with small pots to how we ensure the defined contribution generation can maximise their retirement incomes.
And then, of course, we have a new government and pensions minister to welcome.
Ros Altmann has a lot of experience and an understanding of the issues, and we look forward to working with her.
The one constant over the past few years has been auto-enrolment – more precisely, the success of this policy to date.
So far the sector has enrolled more than 5.3m people and opt-out levels are low. But there is still a lot of work to do.
Although the sector has auto-enrolled almost 50 per cent of the total population of eligible savers, only 3 per cent of employers have been affected.
The challenge is to continue to roll out the programme for the remaining 97 per cent, through to 2018.
These small and micro employers are particularly important. Unlike their larger cousins, just two in 10 have an active pension scheme in place.
The workers they employ are less likely to have had access to a pension in the past. It is this ‘unpensioned’ group that will really benefit.
While pensions may be new territory, it is our job to make the process easy, straightforward and empowering.
With so much else happening in the sector it might be easy to lose focus. We must keep our eyes on the prize, ensuring a new generation is enrolled into a workplace pension and saving confidently for retirement.
Tim Jones is chief executive of Nest
