As we creep closer to the increased auto-enrolment contribution levels in 2019 and with talk of auto-escalation, this interesting case study caused me to ponder on whether employees would miss what they never had.

If, as in this instance with Nationwide, 7% of salary is deducted and added to pension (with the option for employees to opt out of 3%). In this instance 84% of employees did not opt out meaning they were paying more into pension.

What would have been the marginal difference felt by an employee? If we assume a salary of £30,000, paying basic rate tax and NI, then the difference between 7% and 3% pension deduction will be £75 less a month in take home pay.

This is the equivalent of around the cost of one cup of  take away coffee per day.

For any employee in any company, it would be interesting to see if the £75 didn't arrive in their take home pay, would they miss it? Or would they adjust their lifestyle to accommodate such a change? If this was offered to them as a choice, would they choose differently?