Auto-enrolment (AE) has transformed UK pension participation since its phased rollout began in 2012
- Originally aimed at large employers, it now supports over 1.25 million employers via Master Trusts like NEST, Smart Pension, and The People’s Pension.
- AE improved access and affordability, but also drove market consolidation, higher standards, and pricing transparency.
- The shift from commission-based schemes to transparent fee structures benefits employers and savers alike.
- Default fund performance varies significantly—choice of provider can greatly impact member outcomes.
- Auto-enrolment succeeds by using behavioural nudges, but challenges remain:
- Contribution levels may be too low
- Employee engagement is often minimal
- Small pension pots from job mobility create inefficiencies
- The future focus: raising contributions, improving digital engagement, and possibly creating lifetime providers that follow employees through career changes.
- WPD helps employers enhance AE schemes through scheme reviews, salary sacrifice, and integrated payroll support.