Auto-enrolment pension schemes

I cannot persuade my adult children to get pensions. There must be many others in a similar position. Is auto-enrolment the only answer?

 (30844899)
(30844899)

Mike Freer, of BWCI, replies:

IT has always been difficult to get the young interested in pensions. Typically they have other priorities, less available income and little interest. The pensions industry has also struggled to shake off its fusty image and complex rules. If your employer does not offer a pension scheme it can seem daunting to go it alone. The costs are likely to be higher, too.

It is difficult to see any of these factors changing any time soon. A shame, too, since the early contributions are expected to get the most investment growth.

That is why, in some jurisdictions, auto-enrolment has ridden to the rescue. This obliges almost all employers to offer workplace pensions. Employees are automatically included; they have to make an effort if they want to opt out. Singapore has had auto-enrolment for decades, the UK for nearly one decade and Guernsey is on the brink (only held back by Covid-19 issues).

Jersey is currently weighing up its options.

Of course, it is not just the young who are expected to benefit, but society as a whole. And this is why it is not just individuals making contributions, but also their employers and the States, to make meaningful savings for retirement.

If they cannot wait for auto-enrolment, it would be worth checking if their employer has a scheme they can join. If it’s a pan-island employer, it is probably already getting one organised now to cover its Guernsey obligations.

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