Auto-enrolment – 9 million people, 9 minutes

Cartooned Alarm Clock

Pensions

MoneyPlus Features Team

23rd October 2012 at 9:19am

Auto-pilot

Most of us dread the sound of the alarm clock in the morning, but know we need it to start the day. It’s not a dislike of our own consciousness that makes us dread it so much. It’s simply the shock of being woken from our slumber. Still sleepy, furry mouthed, unable to open our eyes properly, loving the cosiness of our beds, no wonder it’s hard to rise to the challenge of getting up. It’s all very unpleasant.

Most of us will spend the first few minutes or even the first hour on auto-pilot, just going through the motions of the regular morning routine – breakfast, shower, teeth, maybe not in that order, but you know what I mean. Granted there are some anomalies among us: those people who seem to leap out of bed with a clear head, boundless energy and the ability to chat on morning trains. They must look at us with frustration and wonder why we’re so monosyllabic and still half asleep.

Auto-enrolment

But is it so bad to be on auto-pilot every morning? I happen to think it isn’t a problem at all. I know the routine and get things done ok, time and again, without having to think about it. Which, funnily enough, is just what auto-enrolment promises to do. Between October this year and 2018, as many as 9 million employees will start being enrolled automatically into their company pension plans. They won’t need to think about it, it will just happen.

They will be able to choose which funds they invest in or, if they take no action, they will be enrolled into their scheme’s default fund. It’s all being made very easy indeed. It would be great if getting out of bed in the morning was made that easy too. Which is why so many of us love the snooze button. Did you know that the designated ‘snooze period’ is usually 9 minutes? Why 9 minutes I hear you ask? Well, I did some research…By using 9 minutes, modern digital alarm clocks only need to watch the last digit of the time. So, if you hit snooze at 6:45, the alarm goes off when the last digit hits 4 – at 6:54. If the snooze period was 10 minutes, the alarm would go off right away. Or the clock would require more circuitry.

Opt in/out

There’s a snooze facility with auto-enrolment too. As an employee, you can opt out and remain so for three years, when you will be enrolled again, with another chance to press the snooze button if you want to. But just like your morning alarm, the snooze button can get you into bother. And it won’t just be work you’re late for. By putting off saving for your retirement, your retirement could slip further and further away.

What do you think?

What are your questions on auto-enrolment?

To find our more watch our auto-enrolment video.

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