The amount auto-enrolled employees are willing to contribute towards their occupational pension has dropped by almost a quarter over the past year, a report by Scottish Widows has revealed.
According to the 2013 Scottish Widows workplace pension report, of 5,200 people studied, 556 had already been auto-enrolled and 416 had opted out. Of those yet to be auto-enrolled, 14% are expecting to opt out. Only 2,626 of those people studied were working and employed.
The amount those willing to be auto-enrolled were prepared to save each month had fallen by 24% to £51 compared to £67 last year. This attitude was reflected across every salary bracket, except for those on incomes of £50,000 or more.
Under auto-enrolment, employees on an annual salary of £10,000 - £30,000 are expected to contribute £85 monthly to reach a total monthly savings goal of £250 per month, while employees on an annual salary of £31,000 - £50,000 are expected to contribute £186 a month to reach a £523 monthly savings target. Those earning over £50,000 are expected to put £340 per month into their pension towards a £1,101 target.
Although these amounts are above the minimum required contributions, they remain below what is needed to match retirement goals, Scottish Widows said.
They also cause monthly contribution shortfalls of £658, £740 and £1,101 respectively. Scottish Widows said this indicated that employees were still removed from the reality of retirement.
Lynn Graves, head of business development and corporate pensions at Scottish Widows, said: 'Auto-enrolment is a vital tool for improving savings behaviours, but it cannot work in isolation to change the nation's attitude to retirement.'
She said that the pensions industry, government and employers needed to educate the UK workforce about the importance of saving for retirement.
Tom McPhail, head of pensions research at Hargreaves Lansdown, said auto-enrolment was fixing the first part of the pensions problem, with participation rates now increasing rapidly and opt-out rates staying encouragingly low.
Despite this, most employees are not saving enough, while the Scottish Widows research showed that the amounts they are willing to save are actually falling, he added.
'[The report] highlights the vital role that employers, advisers and pension companies have to perform in helping employees to plan effectively for retirement,' said McPhail.
'Some good pension schemes do this for their members but far too many schemes are still stuck in the 20th century when it comes to member engagement.'
