U.K. pension reform to yield saving boost

Auto-enrolment may help 6 million more employees save for retirement
|hrreporter.com|Last Updated: 10/17/2011

LONDON (Reuters) — British pension reforms due to be phased in from 2012 could boost retirement saving by as much as 12.5 billion pounds (US$19.7 billion) per year, according to research by insurer Standard Life .

Auto-enrolment, under which employers will sign staff up to their corporate pension schemes unless they ask to be excluded, has the potential to create up to six million additional savers, Standard Life said.

The change, which starts to take effect in late 2012, reverses the current system under which employees must ask to join their workplace pension plan, and is intended to remedy a steep shortfall in United Kingdom retirement saving.

Edinburgh-based Standard Life stands to benefit. The insurer estimated last week that the switch to auto-enrolment could deliver up to 400,000 new members to the pension schemes it runs for corporate clients.

But Standard Life said auto-enrolment needed to be accompanied by efforts to communicate the benefits of saving to achieve its full potential.

"Our research found that the majority of people are still keen to prioritise saving, particularly when they are helped to understand what it means to them, both now and in the future," Standard Life chief executive David Nish said in a statement

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