Subsequent to our automatic enrolment reforms article in the October 2021 edition of Vision, in July 2022 Guy Opperman reaffirmed the Government’s commitment to broadening out the coverage of eligibility and earnings which are pensioned by:
- lowering the age for being automatically enrolled from 22 to 18; and
- abolishing the lower limit of qualifying earnings, so that contributions are payable from the first pound of earnings.
He is on record as saying he remained ‘of the view’ that legislation on the above reforms, will be passed before the end of this Parliament, bringing the changes into force by ‘the mid 2020s’.
At the end of July, a Private Member’s Bill was introduced in the House of Commons in order to provide the legal basis for the reforms to be introduced through legislation. In turn, the Government said its ‘ambition for the future of automatic enrolment will enable people to save more and to start saving earlier by abolishing the lower earnings limit for contributions and reducing the age for being automatically enrolled to 18 in the mid-2020s’ but whilst doing so would ‘take account of the impact of the pandemic and our overall support for economic recovery, balancing the needs of savers, employers and taxpayers’.
The changes will at this stage not include any uplift to the minimum levels of contribution required to be paid into qualifying schemes. It had been proposed previously that, to enhance incomes in retirement, the minimum level needed to rise from the current 8% to 12%.