Government urged to defer auto-enrolment decisions

The Government is being urged to defer a decision on increasing pension contribution rates for millions of workers, with suggestions that it should wait until the automatic enrolment programme is complete in 2019.

A review of auto-enrolment must take place next year and industry experts are all calling for certain safeguards and improvements. However, some bodies would prefer the status quo to be left until the picture of how it is working is made clear.

As the Confederation of British Industry (CBI) pointed, out, there is a case for waiting to see the full rollout of auto-enrolment before changing anything.

Meanwhile, others would like to see immediate change, such as the removal of qualifying earnings, the band of earnings on which auto-enrolment minimum contributions are calculated.

Others do not see a reason to defer the decision in contribution levels, with the Pensions Advisory Service for one insisting that the minimum contribution levels are currently too low and will not deliver the sort of pension income levels that most contributors will need or expect.

The reason auto-enrolment was brought in was that millions of workers were missing out in a workplace pension because they do not join a pension scheme for a variety of reasons.

However, under auto-enrolment, those earning at least £10,000 and aged 22 or above, are automatically brought into the scheme unless they specifically opt to stay out of it. This means that the vast majority of people will end up having a workplace pension without having to even think about it.

Commenting on the debate, a spokesperson for the DWP said the department is still in the early stages of scoping the review and is working closely with the pensions sector to determine what it will cover.

Posted in Auto Enrolment.