Over 80% say they will remain in auto-enrolment pension scheme

Those enrolled in the scheme will be allowed to opt out between July 1 and the end of August.

A significant majority of people enrolled in the My Future Fund intend to remain in the scheme as the first opportunity to leave it opened at the start of this month, a new survey found.

The auto-enrolment pension scheme opened at the start of the year with employees earning over €20,000 being automatically included in it. The employee contributes 1.5% of their wage to the retirement fund which is matched by the employer and an additional 0.5% is added by the State.

While employees are automatically included in the scheme, they are allowed to opt out and the first opportunity to do so started on July 1 and will run to the end of August.

According to the survey, commissioned by financial advising firm Ask Acorn, 84% of people plan to remain in the scheme with 14% saying they will pause contributions.

Of the 16% of workers who said they are planning to opt out, half say they will redirect contributions to a private pension.

People aged 25 to 34 show the strongest commitment, with 89% planning to stay enrolled. Among 45– to 54-year-olds, 23% plan to exit the scheme entirely, but 13% will redirect savings to a private pensions arrangement. 

Of the 18- to 24-year-olds enrolled in the scheme, 64% plan to remain in it while 27% said they intend to pause their contributions.

Chief executive of financial advising firm Ask Acorn Keith Butler said the findings of the research point to a “strong initial vote of confidence in auto-enrolment and the role it could play in improving long-term financial security”.

“The next conversation should be about whether people can now afford to do more. Someone who has received a salary increase or bonus since joining the scheme may be in a position to increase their retirement savings beyond the minimum contribution levels,” he said.

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“For many workers, that could mean complementing auto-enrolment with an additional pension arrangement that better reflects their long-term retirement goals.” 

Enrolment levels are higher outside Dublin, with 36% of adults in Munster and Connacht/Ulster enrolled, compared to 31% in Dublin and 25% in the rest of Leinster.

The survey of 1,000 adults was carried out by IReach.