The government's plan to auto-enrol everyone into a workplace pension is ambitious but the biggest challenge is going to be getting people to stay in the scheme.

Should the government rely on inertia to keep people saving or does it need to engage people properly?

Penions Tools & Tips

Retirement Tips & Tools

By this time last year one million people will have been auto-enrolled into a workplace pension, and millions more over the next three years. The government is nudging people into saving but they will be able to opt out of the scheme – although those who don't want to be part of the scheme will have to keep opting out every three years.

Penions Tools & Tips

Retirement Tips & Tools



Inertia has never been as important to a government plan. It is bargaining on the British public being too lazy to opt out, therefore saving by default even if they don't want to.

Harnessing inertia is all well and good but it will only go so far – there will still be people that will opt out. The government needs to engage with the public and educate them about what a life without private pension savings will look like.

They also need to educate people about how saving a regular sum each month, even if it is small, can build into a substantial pot in retirement.

The government does a poor job of explaining to people the benefits they get by saving into a pension, such as tax relief – which is essentially a government top up of your pension contribution. There is also the impact of compound interest, which is substantial over decades.

The government-run pension scheme, the National Employment Savings Trust, which many people will be auto-enrolled into is going to kick-start a marketing campaign prompting people to save more.

But would tougher shock tactics be better? If people knew that the basic state pension is equivalent to living life on the minimum wage of £11,000 a year, would they save more?

Asking people whether they could live on a minimum wage in retirement, whether that would allow them to live the life they want to, could be a better way of putting a lack of pension saving into perspective.

Throwing facts and figures at people just means they zone out, we need to show people just what sort of retirement they could face it they don't start saving as soon as they can.

The reality is if you don't prioritise saving over spending now, they you will be choosing between heating and eating in old age.

More stories