Auto enrolment and debt

Most people who’ve been automatically enrolled haven’t opted out, so their employers are deducting money from each payslip to put into an illiquid pension pot. And that’s a good thing. The implicit assumption behind the auto enrolment policy is that people are covering the cost of these deductions by slightly reducing their spending. But what if some of them are taking on more debt to compensate for the cost of these contributions? What would the effect of that be on their wider financial situation? Up to now, there’s been no way to find out whether this is happening.

We’ve been working with the University of Nottingham and Experian to generate a new dataset that matches up people’s pension and credit records, creating a unique opportunity to explore the interaction between auto enrolment and other areas of people’s finances, while preserving people’s data privacy.

Using this data set, we worked with leading researchers from Harvard, Nottingham, and Yale universities, as well as Warwick Business School at the University of Warwick, to examine the effects of auto enrolment on the financial experiences of the hundreds of thousands of people who were enrolled into Nest between 2015 and 2017. During this time, auto enrolment was being rolled out at workplaces with fewer than 30 workers, and the default minimum contribution rate was 2% of income, with the employee usually paying 1%. Because the timing of the roll-out was randomised at the employer level, we were able to isolate the effect of auto enrolment from other factors at the time.

The research was made possible with the support of the BlackRock Foundation and the Money and Pensions Service, and enabled by Nest Insight’s emergency savings programme that was also supported by JPMorgan Chase.

Key findings

As well as increasing people’s pension savings—average savings in Nest were £32 per month, and estimated total pension savings were £38— the research found that after being automatically enrolled people’s credit scores showed a positive increase over time and their likelihood of defaulting on debts decreased. Interestingly, people were also slightly more likely to take out a mortgage, suggesting perhaps that being automatically enrolled may have encouraged some to take another step on their financial journeys.

The research also found that during the early stages of the auto enrolment rollout, there was an average increase of £7 per month in existing overdrafts or loans. Whilst this may have been a short-term effect as people adjusted to the cost of their pension contributions, the evidence does suggest a need for nuance in any consideration of raising auto enrolment minimum contribution levels in the future.

You can read more about our findings in this blog post: How much are UK workers really saving as a result of pensions auto enrolment?

  • Understand the impact of mandatory or quasi-mandatory increases in pension saving on household debt.
  • Identify whether increased pension contributions are wholly or largely funded through reduced consumption or increased debt – or a combination.

To understand the cause-and-effect relationship between pension deductions and credit, we’ve taken advantage the large-scale, staggered roll out of automatic enrolment among smaller UK employers between 2015 and 2017. Employers with fewer than 30 employees were assigned automatic enrolment duty dates at random over a 22 month period. Using linked Nest and credit file data, we are estimating the effects on:

  • debt (secured, unsecured, revolving, non-revolving)
  • creditworthiness (bankruptcy, default, credit score)
  • pension contributions.

Our programme partners

BlackRock is a global investment manager serving the UK market for more than 30 years with a purpose to help more and more people experience financial well-being. BlackRock’s Emergency Savings Initiative is made possible through philanthropic support from the BlackRock Foundation. The initiative brings together partner companies and non-profit financial health experts to make saving easier and more accessible for low- to moderate-income people across the US and UK, ultimately helping more people to establish an important financial safety net. For more information, visit:

JPMorgan Chase & Co. (NYSE: JPM) is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorgan Chase had $4.0 trillion in assets and $285.9 billion in stockholders’ equity as of March 31, 2022. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S., and many of the world’s most prominent corporate, institutional and government clients globally. Information about JPMorgan Chase & Co. is available at

The Money and Pensions Service (MaPS) vision is: ‘everyone making the most of their money and pensions’. MaPS is an arm’s-length body committed to providing access to the information and guidance people across the UK need to make effective financial decisions over their lifetimes. For more information, visit 

Our research and delivery partners

Alongside researchers at Harvard and Yale universities, we’re collaborating with:

Experian is the world’s leading global information services company. During life’s big moments – from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers – they empower consumers and their clients to manage their data with confidence. Experian help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organisations to prevent identity fraud and crime. For more information, visit:

The University of Nottingham is a research-intensive university with a proud heritage, consistently ranked among the world’s top 100. The university prides itself in unlocking the potential of its students and offering a life-changing experience. It has a pioneering spirit, expressed in the vision of its founder Sir Jesse Boot, which has seen it lead the way in establishing campuses in China and Malaysia – part of a globally connected network of education, research and industrial engagement. The University’s state-of-the-art facilities and inclusive and disability sport provision is reflected in its status as The Times and Sunday Times Good University Guide 2021 Sports University of the Year. It’s ranked eighth for research power in the UK according to REF 2014, and has six beacons of research excellence helping to transform lives and change the world. Alongside Nottingham Trent University, it also leads the Universities for Nottingham initiative, a pioneering collaboration which brings together the combined strength and civic missions of Nottingham’s two world-class universities and is working with local communities and partners to aid recovery and renewal following the COVID-19 pandemic. To find out more, visit:

Warwick Business School is the largest department at the University of Warwick, delivering courses from Undergraduate and Postgraduate level to MBAs, DBAs, PhDs and an Executive Education programme. Consistently ranked among the world’s best business schools, its Distance Learning MBA has been named number one in the world by the Financial Times for the last three years and The Economist has rated its Full-time MBA the best in the UK six years in a row. Thought leaders in Leadership, Strategy, Behavioural Science, Healthcare, Finance, Future of Work, Entrepreneurship & Innovation, and Sustainability, WBS research is published in the world’s leading science journals influencing Governments, policymakers and industry. To find out more, visit: