Stop Throwing Stones at Auto-enrolment

There’s something of a pensions apartheid in this country, particularly between the public and private sectors. It’s not just a DB vs DC thing or unfunded vs funded: for millions of workers it’s a pension vs nothing thing. From about a year’s time, auto-enrolment will start putting those people in a pension scheme for the first time.

However, while auto-enrolment seeks to use the insights of behavioural finance to get people in, some pensions industry people are (presumably unwittingly) using other psychology insights to put people off. Headlines along the lines of “35% to opt out of auto-enrolment” suggest to the target audience that their peers are poised to leave. Our deep-seated nature means that we instinctively feel peer pressure and are inclined to conform. The corollary, a headline saying “65% opt for ‘free money’ towards their retirement”, might be contested by sponsoring employers and pedants but would encourage the opposite response.

In a recent blog post I invited you to ponder pensions inequality and whether it’s going to get better or worse. Auto-enrolment is not perfect and it’s no silver bullet but it is a first step. For millions (35% of workers says one large insurer today) it’s the difference between not enough and nothing at all. Let’s not talk it down!

No one is to stone anyone even, I repeat, *even* if they do say auto-enrolment

Advertisements

About sipphound

Chewing over pensions, saving and retirement issues. Sniffing around financial planning, personal finance, investing and behavioural influences. All personal opinions, no company represented and no advice given.
This entry was posted in auto-enrolment, Behaviour, Pension policy and tagged , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s