Cost-of-living | Are your people opting-out of their company pension? Ensure they weigh their options carefully…

By David Pinner, Employee Benefits Consultant

Why are people choosing to opt-out?

As your people are struggling with the financial pressures of the cost-of-living crisis, the media are reporting that growing numbers are having to make some difficult spending decisions – cutting back ‘discretionary’ spending to ensure they can afford their essentials.

In these troubling times, it isn’t surprising that for some, workplace pension contributions are considered discretionary, and they are making the choice to opt-out.

One recent survey revealed that more than 1 in 5 people have either opted out or are considering opting out of their pension scheme in response to rising inflation (AJ Bell, Sep 2022). The Department for Work and Pensions’ own figures released on 26 October are more modest, with opt-out rates increasing by 19.5% to 10.4% overall.