Speaking at HR systems provider Ceridian’s customer conference, Webb said: “Now we’ve got people in, how do we get them up? Our view is that when people get a pay rise they should pay themselves first. This involves putting aside an appropriate sum of money for their future.”
He added he believed escalation could be achieved without legislations and urged employers to be innovative. He said he was not in favour of mandatory enrolment into a pensions scheme, as in Australia where employees are not allowed to opt-out.
“People engage better with the scheme if they feel they have a choice,” he said. “One of the first things we mention when the send the paperwork for auto-enrolment is that they can opt out. That element of control is very important.”
Webb spoke of the high levels retention in the auto-enrolment: only one in 10 people who have been auto-enrolled have chosen to opt-out. He added that younger people are also choosing to engage with pensions schemes.
“We are looking to create a new social norm where people save for their future,” he said. “We don’t want a situation where people reach retirement age and get a shock because they don’t have the finances to continue the standard of life they are used to, simply because they don’t have enough money put aside.”
With the roll out of auto-enrolment now reaching smaller companies, Webb acknowledged this will bring challenges but said pensions providers will offer more ‘off-the-shelf’ solutions for SMEs to implement.
“Smaller firms will receive a package that works for them rather than spending a lot of time working out what schemes suit them and their employees,” he said. “We are taking steps such as presenting their options in plain language instead of pensions jargon.”