Over 55s are three times more likely to opt out of auto enrolment pensions than their younger counterparts, NOW: Pensions has reported.

According to recent data from the pension provider, among NOW: Pensions’ members aged 55 and over, the opt-out rate is 22 per cent, in comparison to just eight per cent for those aged under 55. For 20 to 40 year olds, the opt-out rate is even lower at seven per cent.

NOW: Pensions noted that while over 55s are three times more likely to opt-out of workplace pensions than their younger colleagues, they could double their money if they remained enrolled.

Someone earning the average UK wage of £27,000 per year could miss out on up to £422 a year if they decided to opt out, the firm noted.

Considering the higher opt-out rates among older savers, NOW: Pensions policy director Adrian Boulding believes that pension providers have failed to communicate effectively about the benefits of AE with older people.

“Whilst they may think that it makes sense not to have another pension scheme – perhaps they think they’ve saved enough, or perhaps they feel they can’t afford it - people who do this are effectively throwing money away by missing out on their employer’s contribution to their pension, and the government’s contribution in the form of tax relief,” Boulding said.

Boulding concluded: “Whilst some people who are near the lifetime limit do need to opt out, if you are not in that situation then it just doesn’t make sense to opt out – especially at older ages! … You could more than double your money by putting it into a pension.”

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