Pensions minister rejects fears over auto-enrolment opt-out

Concern among many in the industry that opt-out rates will be high among workers that are automatically enrolled in a pension scheme after new rules are introduced in October this year have been dismissed by the pensions minister Steve Webb.

In the first of an exclusive two-part video interview with Aamina Zafar, senior report on FTAdviser sister title Financial Adviser, Mr Webb said if you overcome the hassle and cost of pension saving and opt people into a scheme they will save.

His comments contradict the findings of a report released earlier this week by Aviva, which revealed that corporate financial advisers expect at least one-third of workers to opt out of saving, while one in five think up to 50 per cent may choose to do so.

Mr Webb, however, predicted that up to 80 per cent of those that are automatically enrolled in the autumn of this year will either begin saving for the first time, or will up the amount they save.

He said: “We are going to be auto-enrolling the best part of ten million people and we think anything between five million and eight million will either be saving for the first time or saving more.

“I think many people know they ought to save and want to save but just taking that step is the challenge. This [auto-enrolment] will overcome that.

“Firms can choose a scheme, they will have to put money in and the taxpayer will put money in and I think that will be the incentive that many people need.”

To watch the full interview with Mr Webb, click here.