Hargreaves Lansdown details response to auto-enrolment review

by | Mar 20, 2017

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Hargreaves Lansdown

As the deadline for responses to the auto-enrolment review approaches (Wednesday 22 March), Hargreaves Lansdown believes that the proposals benefit women, first-time house buyers and the self-employed.

Senior Pension Analyst at Hargreaves Lansdown Nathan Long states: “Pension savers must be front and centre of any auto-enrolment redesign. Relying on inertia has been great for getting people saving, but the next phase of the workplace pension revolution is all about people getting to grips with their personal plans for retirement.

“Engaging with your pension early is crucial, but for younger people the appeal of that first step on the housing ladder leaves pensions starved of attention. Limited early access to pensions to buy a first home will engage younger workers with pensions and investing for their future.


“A greater proportion of low paid, part-time workers are women and it is they and the self-employed that are the big losers under the current policy. We cannot continue with this patchwork quilt of saving, people simply must be saving for their life after work. Lowering the amount you need to earn before being enrolled and sweeping up the self-employed as part of the tax return will include parts of the labour market that have until now been ignored.’

Key points

Theme 1- Coverage

  • Workers should be enrolled into a pension as soon as they earn more than the New State Pension.
  • The self-employed should be auto-enrolled with contributions collected via tax returns.

Theme 2 – Engagement

  • Both the self-employed and employed should be given choice as to which pension provider their auto-enrolment contributions are paid.
  • Allow early access to pensions for first time house purchase to engage younger workers with pensions and investing for their future.
  • The Government should introduce an age 50 financial health check to ensure workers engage with their pension with sufficient time to influence their retirement plans.
  • DWP should ensure metrics of engagement are captured by IGCs and Trustee boards.

Theme 3 – Contributions

  • Workers should accrue pension contributions from the first pound they earn.
  • All workers should be eligible for an employer contribution, even if they are not automatically enrolled.
  • DWP must put in place a comprehensive system to record data on those choosing to opt-out of auto-enrolment as well as those who cease contributing. This evidence will be critical in how to increase minimum contributions and how this increase should be divided between employees and employers.

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