Warning to young employees opting out of auto-pensions

By Jeff Prestridge
Last updated at 9:53 AM on 19th December 2011

Workers who delay taking advantage of new rules next year allowing them to auto-enrol in an occupational pension could end up with a retirement fund 20 per cent lower than if they had joined immediately.

The finding is based on research by the Pensions Policy Institute for insurance giant Prudential. The PPI found that thousands of workers would opt out of the pensions.

Barry O'Dwyer, Prudential UK deputy chief executive, said: ‘Auto-enrolment is expected to encourage an extra four to nine million people either to start saving into a pension earlier or to save higher amounts.

'But we need to be realistic and recognise that some young people will not want the additional expense of investing in a pension.'

He said it was crucial that employers should continue to back workplace pensions with generous contributions made on behalf of employees.

Auto Insurance Of Las Vegas - Affordable Automobile Insurance Coverage

Auto Insurance of Las Vegas is a local auto insurance provider in Las Vegas that offers reasonably priced Las Vegas Car insurance coverage to the residents of Las Vegas and surrounding areas. Its agents are fully qualified and assist clients in determining the optimum auto insurance and the most reasonable Las Vegas Auto Insurance quote and premium for the Las Vegas Auto insurance. Theirlocal professionals deeply understand the needs of the locals and make available accurate auto insurance for them. This Las Vegas Car Insurance company offers a variety of insurance possibilities to its clients.

Being locals gives Auto Insurance of Las Vegas the benefit of knowing and understanding the market and the issues in a better manner. Therefore, they can advise clients on the optimum Las Vegas Auto Insurance, ensuring there is just enough auto insurance coverage. Their friendly and knowledgeable auto insurance agents offer reasonable and affordable Las Vegas Auto Insurance Quotes for insurances such as automobile insurance, motorcycle insurance, truck insurance, recreational vehicle insurance and other Las Vegas Car Insurances.

Quotesby the agentsof Auto Insurance of Las Vegas are only determined after a thorough analysis of the type of Las Vegas Auto Insurance required and the precise level of coverage needed. They make sure that the minimum state standards are adhered to for every Auto Insurance Quote Las Vegas. In case there is a Las Vegas Car insurance coverage that goes beyond the state standards, their thoroughly trained and qualified professionals duly examine the policies concerned and only approve the auto insurance if there is an urgent need or utmost necessity to increase the coverage.

They provide the most competitive and affordable Las Vegas Car Insurance coverage to their customers. The background resources are properly examined and only the best Las Vegas Auto Insurance Quote is offered to the clients. Since they consider clients as their foremost priority and are absolutely customer focused.

They recommend several strategies to the clients for selecting the optimum Las Vegas Car insurance and coverage. Such strategies have helped a lot of their clients achieve best quotes that have been increasingly beneficial for the clients. They have years of hands on experience in the field of Las Vegas Auto Insurance coverage and policies. Their clients depend on them for reliable and profitable Las Vegas Auto Insurance Quotes.

Auto Insurance of Las Vegas believes in providing result oriented solutions for its clients in order to establish long term business relationships that spell enhanced business for them and better Las Vegas Auto Insurance coverage, Las Vegas Car Insurance coverage and more affordable Las Vegas Auto Insurance Quotes for the clients.

The U.K.'s Faulty Car-Insurance Market

Car insurance in the U.K. is a wreck.

Prices for auto insurance are rising 40% annually, but many of those writing the business still are losing money. The Association of British Insurers estimates the industry as a whole hasn't been profitable for 16 years. Now, the Office of Fair Trading is investigating the rise in prices. It certainly could apply the jumper cables.

With 10 companies, and none exceeding a 30% market share, car insurance looks like a competitive market. Price-comparison websites, which now dominate sales, are helping to drive prices down. But the role of such websites will be included in the Office of Fair Trading's investigation. This year, it raised concerns about insurers sharing car-insurance pricing information on market analysis software.

Insurers blame spiraling prices on claims inflation and litigation costs, following the emergence of a "no-win, no-fee" claims-management industry. For low-value claims, insurers now estimate they are paying almost as much to lawyers in fees as they are to the injured party. They say insurance fraud, too, has risen. Over the last five years, personal-injury claims from car accidents have risen 10% annually, including a large number recently for whiplash, which is hard to prove medically.

But claims inflation is partly insurers' own fault. The problem is referral fees, money insurers receive from passing accident victims' details onto third parties. That helps fuel the growth in claims, because lawyers recoup the money off the insurer of the party at fault. Insurers are now pushing for the government to ban such fees, a move backed by the legal industry's representative body, the Law Society. AXA, already, has stopped the practice, but some companies are reluctant to act unilaterally.

Outlawing such fees would be a good first step. Requiring greater proof of damage to the car or driver before paying injury claims might be another.

Still, one reason for high prices simply is that insurers are earning lower returns on their investment portfolios, which in the past made up for weak underwriting profitability. There's little the Office of Fair Trading can do about that.

One in seven drivers has no insurance

Despite laws in nearly every state requiring auto insurance, one in seven drivers in the USA goes uncovered.

That's according to an industry group that estimates 13.8% of motorists are uninsured, a number that has climbed during the economic downturn as many financially-pressed Americans allowed their insurance to lapse.

"Over the last 20 years, uninsured motorists and the unemployment rate have tracked fairly closely," says David Corum, vice president of the Insurance Research Council, a non-profit supported by insurers.

Insured drivers pay a hefty price for fellow motorists who have no policies — $10.8 billion in 2007, according to the most recent data from the National Association of Insurance Commissioners.

"Most of the people that do have insurance have coverage that includes uninsured motorist coverage … to protect them (if) they're injured in an accident caused by another motorist who does not have insurance," Corum says.

Automobile insurance is compulsory in every state except New Hampshire, says Loretta Worters, vice president of the Insurance Information Institute— but that doesn't deter scofflaws.

"Laws in most states have proven ineffective in reducing the numbers of drivers who are uninsured," Worters says. "Some drivers can't afford insurance, and some drivers with surcharges for accidents or serious traffic violations don't want to pay the high premiums that result from a poor driving record. It is costly to track down violators of compulsory insurance laws, and unless the odds of getting caught are high and the penalties severe, drivers will continue to flout the law."

The rate of uninsured motorists varies widely — from 4% in Massachusetts to 28% in Mississippi, according to the IRC.

In Massachusetts, drivers must show proof of insurance before they can register a vehicle. Insurance commissioner Joseph Murphy attributes his state's low rate of uninsured motorists largely to that requirement. About half the states have a similar requirement, according to the Insurance Information Institute.

Mississippi, however, has no way for police to determine whether a driver has coverage, says insurance commissioner Mike Chaney. He says he worries about privacy and entrapment if data are misused, and his state doesn't require proof of insurance. "The legislature has never had the fortitude or the backbone to do it," he says.

As economy sinks, pay-as-you-go insurance soars

As job growth stalls and household budgets shrink, more drivers are warming up to cost-cutting "pay-as-you-go" car insurance programs.

Pay-as-you-go car insurance plans peg your car insurance rate to the number of miles you drive. Drivers also receive discounts for avoiding violations and accidents, and for limiting time on the road during peak hours and late-night hours.

If you meet all pay-as-you-go requirements, it's possible to save up to 30 percent on car insurance rates.

A majority of drivers who took a joint MSN-Insurance.com online poll said they would at least consider driving less if it meant they could save money on car insurance.

Car insurance companies respond to demand
Two of the nation's biggest insurers are now responding to this growing demand for pay-as-you-go coverage.

A few weeks ago, State Farm - the country's largest insurer - announced plans to introduce a new telematics-based effort dubbed In-Drive to drivers in Illinois. Additional states are slated to receive In-Drive in 2012.

Allstate - the nation's third-largest insurer - also recently expanded its Drive Wise pay-as-you-go program to Ohio and Arizona after an earlier rollout in Illinois.

It's no coincidence that pay-as-you-go insurance is on the upswing at a time when the economy is in a downward spiral, according to Robert Passmore, spokesperson for the Property Casualty Insurers Association of America (PCI).

"A lot of companies are offering it, and a lot of people are driving less and looking for ways to save money," he says.

More control, lower car insurance costs
If you join a telematics-based program, you'll typically be asked to install a device into your car's diagnostic port (located below the steering column) that records information such as:

How many miles you drive
How often you brake hard
How smoothly you navigate turns
Initially, privacy advocates raised concerns about these devices and their ability to snoop on drivers. But the success of programs such as Progressive's Snapshot and a GMAC Insurance program based on OnStar technology apparently has convinced more insurers that pay-as-you-go insurance is the wave of the future.

The future of pay-as-you-go car insurance
Although pay-as-you-go insurance is just now catching on, advocates have been pushing it for years as a way to both save customers money and to achieve other social benefits, such as reducing traffic fatalities and cutting back on pollutants that contribute to global warming.

A 2008 study by the Brookings Institution noted that, "Just as an all-you-can-eat restaurant encourages more eat­ing, all-you-can-drive insurance pricing encourages more driving. That means more accidents, congestion, carbon emissions, local pollution, and dependence on oil."

While it appears the world is catching up with those sentiments, it's unlikely that pay-as-you-go insurance will become the dominant form of pricing in the industry.

Kraft points out that such programs are not the best option for all policyholders. If you drive frequently or have a spotty driving record, pay-as-you-go probably doesn't make sense.

"It's not going to be a program that we're going to end up seeing 60 [percent] or 70 [percent] or 80 percent of our customers opt into," he says.

Still, Kraft believes drivers who choose pay-as-you-go automobile insurance coverage to save a buck during hard times will stick with the program long after the economy heals itself. And Passmore still sees room for the trend to grow.

"If people like it and perceive it as a value and save money, why not?" Passmore asks.