Recommendation 22

Individual schemes hold information on participation rates for some groups, for example participation in the NHS Pension Scheme is lower among younger employees.48 However, HM Treasury told us that there are lots of imperfections in the quality of participation data, and that it does not as standard collect detailed opt-out rates..49 As a result, HM Treasury could not give us a clear answer as to whether overall younger employees and those on lower pay are more likely to opt out of their pensions than other groups, or whether participation rates are increasing or decreasing over time.50 HM Treasury told us that while anecdotally it was aware of this issue, the data was limited – it was not clear on why people choose to opt out of their pensions or which groups are more likely to.51 HM Treasury also told us it does not collect any data on what happens to people once they opt out of their pension scheme.52 There are understandable reasons why people may choose to opt out of pension schemes (for example, short-term spending priorities) but inadequate pensions are likely to cause issues in the future and push costs into other policy areas, for example if people are more likely to be reliant on the benefits system.53 Inequalities and differences between groups