‘6m more’ may save for pensions

Automatic enrolment into pension schemes could create an extra six million people saving, generating £12.5 billion annually to the retirement pot by 2017, research from Standard Life has suggested.

The Keep on Nudging report, developed with academics from the University of Edinburgh, was based on a survey of more than 600 employees who represented the “squeezed middle”, earning between £18,000 and £45,000 a year.

Just under half of them (48 per cent) said they would find it easy to save an extra £50 a month if they had to, the report found.

But it also said communication was crucial to the scheme’s success.

Under the reforms, all eligible employees will need to be automatically enrolled into a qualifying workplace pension scheme.

The report found retention rates (the proportion of employees not opting out) could be as high as 82 per cent when information is presented “clearly and effectively”.

A Department for Work and Pensions spokesman said: “Our reforms will get millions saving into workplace pensions, many for the first time.

“It’s vital that people understand these changes.”