"Understanding this puzzle is important - a key issue for automatic enrolment is the extent to which it gets the right people into a workplace pension and the right people to opt out of being in one. This is the subject of ongoing research at the IFS. But overall the evidence so far on automatic enrolment is positive."
The IFS added improvements to auto enrolment should be made sooner than the government’s current proposed date of ‘mid-2020s’, and should include extending the band of earnings to which minimum contributions have to apply or increasing the minimum rates of contributions.
Angela Maher, managing director of Acumen Financial Partnership, said: "Auto enrolment has been hugely positive for pension provision.
"It’s also good for society and the country as a whole, as it encourages people to take responsibility for their future. It makes little sense to me to opt out of auto enrolment as you are effectively turning your back on a pay rise.
"However, you have to give people some degree of autonomy in how they save for retirement. Increasing the minimum contributions further may start to feel like a tax and could result in more people opting out, which would defeat the whole purpose."
