Companies could be wasting £2.1bn a year by auto-enrolling workers who will not benefit from pensions, a consultant warns.
Creative Benefits said statistics show 20% of private sector employees enrolled post-2012 - more than 4 million people - will not benefit from pension savings, and should opt-out for financial planning reasons.
Upcoming employer duties - which make it compulsory to enrol employees into a qualifying work place pension scheme or NEST - will result in swathes of workers paying into a pension and missing out on benefits such as pension credit in retirement.
It said inertia - one of the big reasons for introducing soft compulsion - would see many workers remain enrolled despite it not being in their best financial interest. The firm said overall this could cost businesses £2.1bn in ‘wasted' contributions.
Development manager David Marlow said: "There is no doubt that pension saving in the UK needs to increase, however lumping everyone into the same scheme regardless of a persons age, existing debts and life plans is extremely dangerous."
