Auto enrolment: some still not invited to the party

Today is the second birthday of auto-enrolment and, while the initiative is largely a success, there are still a number of people who have been overlooked in the plan to get everyone saving for retirement.

It's two years since the government gave employees a shove into saving by automatically enrolling them into their workplace pension plan and taking a gamble that inertia would keep them there. That gamble paid off and so far the opt-out rates has been just 10%, far less than the feared 30% that was doing the rounds before October 2012.

No-one can deny that it has been a huge success, and by the time everyone who is supposed to be is auto-enrolled by 2017 there will be an estimated nine million extra workers saving for their old age.

However, there are still some people who aren't benefitting from the government's shove.

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The self-employed (which number 4.5 million) have long been a thorn in the side of the auto-enrolment scheme; how do you get people who don't have an employer or a pension scheme to save? As a freelance, I'm included in this pile of pension no-hopers, my own inertia meaning my pension contributions are few and far between.

Apparently I'm not alone, half of self-employed people don't have a pension and a fifth of those working for themselves are planning on selling their business to fund their retirement.

To make pensions more attractive to the self-employed who don't benefit from employee contributions, Hargreaves Lansdown has suggested making pension contributions exempt from Class 4 national insurance. This is certainly an idea I could get on board with but I still feel I need a push in the right direction.

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People aged 40-plus

The other group of people who are missing out when it comes to auto-enrolment are those in their late 40s who are too late to really benefit from auto-enrolment, because they don't have enough time to build up a substantial pot of money, but who are still far away enough from retirement that they will have to rely on their own steam to fund it (essentially people facing a higher state pension age and who won't benefit from generous defined benefit pensions).

While auto-enrolment is great for younger generations to ensure a comfortable retirement, for many it is too little too late.

Like the self-employed those is their late-40s need to start taking stock of their pension fund and throwing money at it. Now, where's my cheque book.

Read more:

Pensions: is auto-enrolment doomed to fail?

What would Thatcher think of auto-enrolment?

More people to save into a pension