Damage by Default: The Flaw in Pensions Auto Enrolment
Posted: 01/04/2017
Workplace pension auto enrolment means more people are saving for their retirement, and upcoming increases to minimum contributions will dramatically boost the amount being saved. Since most employees do not actively engage with their pension savings, £43bn will be invested each year in default funds from 2019. But default funds cannot meet the varying needs of millions of savers, £9bn will be wasted through contribution misallocation each year. New behavioural science research can help overcome the engagement barrier and provide recommendations for Government, pension providers and employers to reduce the waste of savings.