‘Informed inertia’ required to maintain AE member levels following contribution rise

“Informed inertia” is required to ensure that members remain auto-enrolled up to and following the planned contribution rises this year and in 2019, Now Pensions director of policy Adrian Boulding has said.

Ahead of the upcoming auto-enrolment pension contribution increases in April this year, Now Pensions has suggested that pension providers, employers and the government should work together to drive home the benefits of pension saving and encourage members to do nothing.

While the success of auto-enrolment has been somewhat accredited to members’ inertia, the pensions provider told Pensions Age that with increased rates set to be taken out of employees’ pay for their pension contributions, they should be informed and ensured of the benefits of remaining opted-in.

Although employers are not required to provide communications to employees regarding the planned increases, Now Pensions is working on providing its employers with information kits to share with members.

The pension kits can work to reinforce the need and importance of saving for retirement and highlight that it is “not just you paying more”, but employer contributions are to rise also. It is from this knowledge, therefore, that members could be persuaded to remain opted-in and essentially “do nothing” to alter their pension arrangements.

Contribution rates are set to increase to 5 per cent in April 2018 and 8 per cent in April 2019.

Looking at a more active approach to informing members, Boulding voiced his support of the pensions dashboard project. Boulding echoed a similar view to many supporters that “once we’ve got it, we’ll wonder how we ever managed without it”.

He explained that the provider is “delighted” that the Pensions Minister has agreed that compulsion should be necessary and noted that multiple points of access to a dashboard are necessary and should be made accessible “seamlessly” from providers.

While provision of information to the dashboard will firstly be voluntary, Boulding said he expects compulsory provision to be called for by 2020/21.

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.


Inside the world of high net worth lending
The mortgage market continues to evolve, and so too does the answer to the question: what is a high net worth individual in today’s market? In this episode of the Mortgage Insider podcast, host Phil Spencer is joined by Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank, and Islay Robinson, founder and CEO of Enness Global. Together, they explore what brokers really need to know when supporting high net worth individuals.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.