UK: Auto-enrolment. The socialising of pensions
From 2012, the UK government is bringing in auto-enrolment, a semi-compulsory approach to retirement saving, which will result in the automatic enrolment of all qualifying employees into a qualifying pension scheme.
The aim of the auto-enrolment strategy is to move the UK to a position where the vast majority of UK citizens are saving to some extent for their own future pension provision. In theory, this should lead to a vast new market of consumers who are more aware of financial products and the benefits they can bring.
However, the issues involved in bringing a completely new group to the market are not straightforward and the ability to provide products and services to these consumers in a cost effective way ought to be at the forefront of every life and pension provider’s strategy for the future.