Research from the National Employment Savings Trust (NEST) shows UK consumers’ awareness of its policy has strengthened a year into its launch.
Support for the policy has grown, as 68% of those surveyed by the government-backed master trust said it was a good idea.
Awareness among consumers was at 86%, as auto-enrolment enters a significant peak of staging within the coming months.
Alongside consumers, the research, conducted in 2013, showed awareness among employers was also increasing.
More than 90% of employers with between 100 and 999 employees were familiar with the policy, compared with 68% a year earlier.
However, only 68% of those with between 50 and 99 employees followed suit, despite these firms staging in the next six months – although, this was higher than the 30% figure seen in 2012’s survey.
The research also highlighted a lack of confidence in the current defined contribution (DC) pot structure.
Only 33% thought setting a lump-sum target in their DC pot was an appropriate way to think about retirement, lending support to the outcome-based approach for DC.
Almost three-quarters (73%) felt a fixed level of income was better suited, along with half who supported a percentage of their current income.
Some 35% preferred the idea of a lifestyle expense-based target.
Of the members who had been auto-enrolled, support was mixed.
While the majority were undecided, only 28% said they had made the right decision.
Less than one-quarter (24%) said remaining in their auto-enrolment scheme made them feel more comfortable about retirement provision.
As opt-out rates came in lower than expected, the prime motivation for staying in the scheme was not losing employer contributions, cited by 50% of respondents.
Some 43% said it was because they felt it was time to start saving for retirement.
In line with this, the pension provider surveyed consumers on financial priorities.
Saving for retirement was third, compared with seventh in 2011.
While auto-enrolment will have contributed to this, it also followed a shift in the UK consumer mindset.
Overall, two-thirds of employers found the staging of auto-enrolment more difficult than anticipated, as the majority struggled with the legalities.
Adding to this, while 90% said they would seek advice in choosing a scheme, only half said they would be willing to pay.
Tim Jones, chief executive at NEST, said the intermediary sector would be key in helping employers, given that nine out of 10 employers are expecting help.
“Our research suggests there are gaps in their knowledge, experience and preparedness,” he added.
No comments yet