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Auto enrolment to double DC savers by 2030

Automatic enrolment is on course to double the numbers of people saving into a defined contribution (DC) workplace pension scheme by 2030, research by the Pensions Policy Institute (PPI) has found.

The PPI report reveals that if the opt out rate stays at 9%, 8.5 million people could be newly saving into a pension by 2030.

In total 15 million people could be saving into private sector workplace schemes by 2030, the majority of them DC schemes.

At current opt out rates:

  • private sector workplace DC schemes could be worth between £455 and £495 billion by 2030
  • without auto enrolment, private sector workplace DC schemes would be worth £350 billion
  • the total value of private sector DC assets could become greater than private sector DB schemes by 2036.

Daniela Silcock, senior policy researcher at the PPI, said:

“This research shows that DC pensions will play a much greater role in private sector pension saving in the future, though the decisions made by employers and employees will affect the total scale of saving and the value of assets in schemes.”

Nigel Wilson, group chief executive of Legal & General, said:

“Auto enrolment is a tremendous success, and shows what can be achieved when the government, regulator and the industry engage in deep collaboration. People though do need to make higher contributions and retire later, if they are to achieve the retirement income they desire.”

 

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