What happens when employers are obliged to nudge? Automatic enrolment and pension saving in the UK

Concerns about undersaving for retirement have led to policymakers implementing reforms aimed at boosting saving. One such policy is 'automatic enrolment' – where rather than having to choose to contribute to a pension, employees have actively to choose not to save in one. Since October 2012, the UK has been in the process of implementing the first-ever national roll-out of such a policy. This paper exploits the gradual roll-out of this obligation for employers to enrol their employees into a pension to estimate its effect on how much is saved in workplace pensions for private sector employees.

Figure ES2. Workplace pension membership rates among private sector employees eligible for automatic enrolment, by employer size in 2012