In a written statement last week (July 28), Mr Opperman, minister for pensions and financial inclusion, admitted the Department for Work and Pensions does not yet have the data to determine how many employees have reduced their contributions, or stopped saving, since the start of the lockdown period.
This comes after disagreement among experts whether workers should opt out of their pensions to build up funds to help them through the pandemic or stay in.
Mr Opperman said: “We are monitoring the impacts of Covid-19 on workplace pension participation and saving levels and are working closely with the pensions industry and across government to understand the impact of the emergency.”
He added: “Helping people to save for their futures remains a key priority for this government. We put in place an unprecedented package of support to strengthen job and income security during the emergency; this included help to ease workplace pension saving for businesses with furloughed workers.
“As part of the next phase of its response, the government’s goal is to support, create and protect jobs; and giving businesses confidence to retain and hire workers supports the capacity for retirement saving.”
At the beginning of lockdown, the Pensions Regulator warned employers against encouraging savers to opt out of auto-enrolment.
The regulator said even though staff may choose to reduce their contribution levels or opt out of the pension scheme altogether in order to save on outgoing costs during the crisis, employers must not encourage this and should continue to carry out their obligations under the existing pension scheme rules.
For those that have chosen to opt out, the Work and Pensions committee urged TPR to consider helping such workers re-enrol sooner than the current three-year timeframe under auto-enrolment rules to protect their pension pot.
At the time, Tom Selby, senior analyst at AJ Bell, said: “The Covid-19 pandemic has placed huge strain on household incomes and it is inevitable some people struggling to make ends meet will have felt it necessary to opt out of their workplace pension.
“It is crucial these people are nudged back into saving for retirement as soon as possible.”
Meanwhile, the Institute for Fiscal Studies has previously suggested savers on the lowest of incomes should opt out of their auto-enrolment pension on a temporary basis to build up a rainy day fund.
According to the IFS, circumstances in which it could be more beneficial for employees to leave a pension scheme included having high current spending needs or low standards of living.
People who were indebted with high-interest loans or were in arrears with bills, such as rent, mortgage or council tax, that may have legal consequences if not paid in time may also be better off forgoing an employer pension contributions in favour of paying off these debts first.
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