UK - Workers aged 55 years or older are more likely to opt out of an occupational pension scheme once auto-enrolment is introduced in 2012, according to research from employee benefits provider B&CE.

In a follow-up survey to 2008 research on employee attitudes to auto-enrolment - and the then proposals for personal accounts - B&CE asked respondents whether they would be willing to meet the minimum level of contributions, and if not why they intended to opt out. The study was conducted in 2008 in an attempt to gauge the impact of the financial crisis on pensions.

Latest figures showed approximately 72% of around 200 respondents intend to contribute the minimum of 4% of banded earnings required under the 2012 reforms - combined with a further 3% from the employer and 1% in tax relief - yet the number of who said they would opt-out has increased slightly from 25% in November 2008 to 28% a year later.

The firm, which operates the £540m (€622m) Easybuild stakeholder scheme for the UK construction industry, said the results were very encouraging despite confirmation of delays to the phasing in of auto-enrolment. The completion of this process in 2017 will be 12 years after the Pensions Commission published their final report recommending soft compulsion and the creation of a national pension savings scheme.

That said, the B&CE survey findings did vary by region and age group. Over 35% of respondents in the North of the UK and Greater London regions said they were planning to opt-out, compared to around 15% in Yorkshire, Humberside, Wales and the South West.

Surprisingly, the research suggested younger people are thinking more about retirement planning, with just 10% of 18-34 year olds indicating they would opt-out of auto-enrolment.

At least 42% of those aged 55 and over said they will not join a pension scheme - a move which John Jory, director of B&CE Insurance, suggested either they feel it is too late to start saving or, more positively, the message about the potential negative impact of means-testing has been received.

However, he argued while it is good that older workers have thought about the impact of auto-enrolment and perhaps realise it may not be in their best interests, "this is not the solution". He added: "We should still sort out means-testing to ensure that every person that saves is better off in retirement than those that do not. If someone has at least another 10 years to go until retirement it should still arguably be worth their while to save."

Other reasons given by the 28% of people intending to opt-out of the reforms were that 24% already contribute to a pension fund, while 21% cited affordability issues. B&CE said this was an increase of around 17% on the previous year but is "perhaps indicative of the current economic climate".

B&CE has also been examining employer attitudes to the reforms in a further survey expected next month.

Jory said: "The survey results for the higher age bands are disappointing but perhaps not surprising. However, overall the results are very encouraging in that only 28% intend to opt out but significantly this falls to only 10% in the 18-34 age group. For this age group, starting to save from a young age could make a major positive impact to the income they can look forward to receiving in retirement."

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