Younger workers stay in while older workers opt out and miss out

01 October 2014

NEST research published after two years of automatic enrolment reveals a marked generational split. Younger workers lead the way on pension saving, with lowest opt-out levels, while older workers could be ‘opting-out and missing out’, with the highest number of opt-outs.

New data released by NEST shows that younger workers have the highest participation in automatic enrolment, with only a 5 per cent opt out rate among workers under 30 years old. Before the new workplace pension rules were launched in 2012, over 25 per cent of this group had declared an intention to opt out. However actual opt-out figures suggest a dramatic shift in the retirement saving behaviour of younger workers.

Commenting on the findings, NEST chief executive Tim Jones said,

‘We know that younger workers often think they are too young to start saving in a pension but so far this hasn’t played out. Workers under 30 are the most likely to stay in their automatic enrolment scheme, with 95 per cent staying in. These participation figures suggest that the policy is working and particularly with the younger generations.’

Highest opt-out rates are among older workers, with more than 28 per cent opting out among those aged 60 and over. This is significantly higher than their younger counterparts. With 1 in 4 older workers opting out, compared to 1 in 20 of younger workers, a generational split seems to be playing out in the automatic enrolment landscape.

Commenting on the findings, NEST chief executive Tim Jones said,

“The new pension freedoms announced in the recent Budget give savers much more control over their finances in later life, including being able to take their pension pots as a lump sum. Older workers who stay enrolled get money from their employer and tax relief. This can double the value of their own contributions, which for many should be a ‘no-brainer’ especially compared to other saving vehicles. When they are ready to retire they can take that money as a lump sum or use it to secure an income in retirement, or both. What worries us is that currently around 30 per cent of workers in their 60s are opting out and missing out on a significant amount of extra money for their retirement.”

NEST Opt-out data by age:

Expected opt out by age

Actual opt out by age


22 - 29





30 - 39





40 - 49





50 - 59





60 - 65


60 -65