Government urged to make auto-enrolment changes to benefit more workers

A new report has made a number of suggestions for the government to improve the auto-enrolment pension system.

If implemented, 4.7 million more people could benefit from these changes.

Put forward by Scottish Widow’s 2024 Retirement Report, suggestions include:

• Extending auto-enrolment to the self-employed
• Reducing or removing the earnings threshold of £10k
• Lowering the auto-enrolment age from 22 to 18
• Raising default pension contributions to 12%

Commenting on the report, Peter Glancy, Head of Pensions Policy at Scottish Widows, said, “The new government has a unique opportunity to hit the ground running and transform pension saving for generations to come. The introduction of auto-enrolment in 2012 was a game-changer, but now it’s time to scale that up.

“Reducing the age threshold to 18, lowering earning limits, bringing in self-employed workers and upping default rates all build on the existing framework and would be incredibly powerful in getting more people in the UK saving enough for the future, while also looking at how people’s financial goals complement each other, rather than compete.

“This is particularly true for younger workers, but the positive impact would be felt across all ages. Indeed, it’s important to remember that by regularly contributing into a workplace pension, employers have a legal obligation to pay at least 3% if not more.

“This is effectively boosting future incomes. Now is the time for action and commitment to improving pension savings and this should form a pivotal part of the new government’s plans.”

To find out more about contracting please contact Lauren on 01206 591 000 or email lauren.monks@contractorumbrella.com.