Warning to young employees opting out of auto-pensions

By Jeff Prestridge

Last updated at 9:53 AM on 19th December 2011

Pension problem: Workers who opt out of new pension arrangements at work could lose out on 20 per cent in old age

Pension problem: Workers who opt out of new pension arrangements at work could lose out on 20 per cent in old age

Workers who delay taking advantage of new rules next year allowing them to auto-enrol in an occupational pension could end up with a retirement fund 20 per cent lower than if they had joined immediately.

The finding is based on research by the Pensions Policy Institute for insurance giant Prudential. The PPI found that thousands of workers would opt out of the pensions.

Barry O'Dwyer, Prudential UK deputy chief executive, said: ‘Auto-enrolment is expected to encourage an extra four to nine million people either to start saving into a pension earlier or to save higher amounts.

 

'But we need to be realistic and recognise that some young people will not want the additional expense of investing in a pension.'

He said it was crucial that employers should continue to back workplace pensions with generous contributions made on behalf of employees.

 

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have not been moderated.

So lets get this right, investing your money into a fund with no guarantees of a return or even your money back, but a guarantee when you die the entire fund will disapear and you will be charged fees indiscriminately is good advice?

Click to rate     Rating   5

pensions will only be worth having when all the money is available to the contibutors own family when they expire.

Click to rate     Rating   5

In matters financial, trust no-one and never give the benefit of the doubt.

Click to rate     Rating   8

I have spotted the article referring to high hidden charges in City's fees which are leaving pensioners and savers worse off in the Guardian and there are already 469 comments,how many more articles are actually going to be written before anything actually gets done about this great injustice?Is there anyone of any political persuasion going to stand up on our behalf?

Click to rate     Rating   7

It wouldn't be so bad if the pension companies didn't take such a huge fee out of them, at the start, while paying and when you cash them in. We must lose at least 50% of the money we pay in.

Click to rate     Rating   12

can you blame them as all we read is the payouts on maturity are not what was predicted/the annuity keep falling but none of this is the fault of the insurrance industry as as anon said their charges never go down when they fail to produce anything like they predicted

Click to rate     Rating   13

I see a representative of Prudential states that it was crucial that employers should continue to back workplace pensions with generous contributions made on behalf of employees.I would have thought that it would be equally crucial that pension providers reduce their charges as the great UK pension investor appears to have some of the highest charges around.Where has Money Mail's article headed up-High hidden charges in City's fees are leaving pensioners and savers worse off-disappeared to?

Click to rate     Rating   15

I beleive in paying in to pension fund but! only if we make it illegal for future governments to steal it. ken moody sheffield yorkshire

Click to rate     Rating   20

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