Just a minority of Nest members opted out of their pensions in the immediate aftermath of the second phased auto-enrolment (AE) contribution increase, the master trust reveals.
An analysis of Nest's nine million members found that opt-out rates had increased by only three percentage points last April, from 6% to 9%. This was at the time minimum employee AE contributions rose from 3% to 5%.
A further "negligible effect" on member cessations was also recorded, while the research also found that people were less likely to cease contributions the longer they had been a member. Members who had been saving for less than nine months were more likely to quit the scheme.
According to How the UK Saves: The Effects of the Second Savings Rate Increase, published by Nest and Vanguard, there was a more pronounced impact on those members who had just begun saving when the increase kicked in. These members were "more sensitive to the rate of change", the report said.
Nest Insight analysis director Matthew Blakstad said: "AE has revolutionised the UK pension system, helping over ten million people to start saving for retirement. Once again, our in-depth analysis of member behaviour following the increase reveals that opt-out and cessation rates have remained very low. This is a real testament to the policy's design, which has gradually eased people into the ‘savings habit'."
The report also found cessations were more likely for those aged under 35, or with incomes over £20,000. it suggested that lower-paid members may have made an active decision to join the scheme, had joined at a higher rate initially, or had incomes improved through government policy such as the National Minimum Wage, all of which could reduce the impact of an increased.
Conversely, those earning over £20,000 may have seen a "more noticeable decrease in wages" but Nest said "further study" was required to understand this differential.
Overall participation remains high at 90%, the master trust added, and the tenure and persistency of savers remaining in the scheme "suggests a normalisation of savings behaviour".
Vanguard senior research analyst Cynthia Pagliaro said: "Over both phasing periods the reaction from Nest savers was minimal in the broadest sense, suggesting that stepping up default contribution rates annually from lower to higher rates was a very effective strategy.
"Both opt-out and ongoing cessation rates are impressively low. By way of comparison, in the United States, the state-based retirement savings plan in Oregon has an opt-out rate of 28%, comparable to the original estimate for the UK's auto enrolment policy.
"While the impact of phasing may have been cushioned by annual tax and wage changes for some, we observe consistency of contributions among longer-tenured Nest members suggesting an ambivalence to the increase and a normalisation of retirement savings among UK workers."
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