Auto-enrolment will continue to dominate the UK pensions landscape in 2013, while members are likely to receive better outcomes as pension charges are expected to continue to be under scrutiny.

Jelf Employee Benefits believes the entire industry’s resources will be stretched to or beyond capacity in dealing with auto-enrolment planning for SMEs, who are likely to finally start taking action to prepare for and implement the changes.

Head of benefits strategy Steve Herbert said: “The pensions industry has a lot on its plate in 2013 and although auto-enrolment began in earnest in September 2012, I believe we’ve only just touched the tip of the iceberg. Many of the larger employers already had some pensions experience – but we are about to head into unchartered territory with many smaller enterprises. We believe a perfect pensions storm could be brewing.”

After the introduction of auto-enrolment in October 2012, next year will show whether employees will stay into their pension schemes and how many will opt out. Fidelity head of DC and workplace savings Julian Webb believes that opt-out rates will not be as high as anticipated.

“We predict that overall opt outs rates for auto-enrolment will be lower than feared at between 10 per cent and 20 per cent, and way below some pessimistic predictions of 40-50 per cent.”

He also believes that the magnifying glass over pension charges will continue to be present in 2013. For members to get the best value for money from their pensions, he feels that default pension fund fees should be capped at 1 per cent, ensure transparency and clarity around consulting charges, and scrap active member discounts, as it is wrong to penalise deferred members.

Additionally, pension providers will need to adhere to the ABI’s Code of Conduct on Retirement Choices by March 2013, by demonstrating that they are offering members optimal support and transparency around retirement income options.

Webb said: “As the drive to educate people about retirement income becomes more prominent, we believe the provision of retirement support in the workplace will thrive which will help to ensure that pension savers get the best possible outcome at retirement.”

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