L&G: Third of workers will opt out of auto-enrolment

Around one third of employees will opt out of pensions when auto-enrolment comes into force after 2012, Legal & General (L&G) says.

A survey of 107 people who will qualify for auto-enrolment into their employers' pension schemes suggests 33% will opt out.

Just under a quarter of respondents said they did yet know what they will do when auto-enrolment becomes law, whilst 46% said they would opt in to pension schemes.

Earlier research by the insurer reveals attitudes towards auto-enrolment and pensions have changed little, L&G said.

In 2007 the government announced its plans to create personal accounts, which later developed into NEST pensions.

L&G surveyed 432 people eligible for personal accounts in 2007, and revealed 37% said they would opt out, 44% said they would stay in and 19% did not know.

Ian Mahoney, operations director of workplace savings at L&G, said: "The proportion of the workforce which is likely to opt out has not changed much in the last four years.

"This is despite a significant level of publicity around the launch of the National Employment Savings Trust (NEST) and the run up to auto-enrolment by the Department for Work and Pensions (DWP)."

Mahoney added 29% of respondents said they had never heard of auto-enrolment.

Of those who had heard of it, Mahoney said many thought auto-enrolment will only apply to people who have no other pension saving.

Very few people were aware opting in would involve signing up to a minimum contribution from their salary, Mahoney said.