Pensions Minister Guy Opperman has reaffirmed the government’s commitment to implementing the recommendations of the 2017 Automatic Enrolment Review to expand coverage of the auto-enrolment initiative.
Commenting in response to a written Parliamentary question, Opperman stated that the government is committed to taking this forward in the mid-2020s by:
Opperman said: ‘In this way we will expand coverage of the successful workplace pension reforms and increase the amounts being put into retirement savings by millions of workers, particularly younger people and lower earners.
The 2017 review report was clear that implementation will be subject to learning from previous workplace pension contribution increases, discussions with employers and others on the right approach, and finding ways to make these changes affordable.
We will do this in light of the impact of the pandemic and our overall support for economic recovery, while continuing to support long-term saving, balancing the needs of savers, employers and tax-payers.’
The government had previously committed to a mid-2020s timeline for auto-enrolment reforms, including as a way to address the pensions gender gap. However, the industry has stated clarity and speed of review is imperative as we step shortly into 2022 to enable the groundwork to be laid for implementation.
Echoing previous considerations, the industry is also calling for the reforms to capture other issues. The Pensions and Lifetime Savings Association (PLSA) has also called for an increase in the minimum auto-enrolment contribution rate from 8% to a total of 12% of pensionable earnings, with consideration of moving to a 50/50 split between employers and employees.
We will update on the detail of the reforms as they unfold.