Commenting on the Association of British Insurers report into the future of Auto Enrolment, Gail Izat, Workplace Managing Director at Standard Life said:
“The progress of auto-enrolment in embedding a savings culture in UK workplaces is in grave danger of stalling if contribution rates don’t change over the next decade. Simply saving into a pension is no guarantee of a good life in retirement, especially at lower contribution rates, when many will face the prospect of a substantial drop in their standard of living when they reach retirement.
“The ABI’s call for the minimum contribution level to increase up to 12% over the next decade is sensible and, if combined with other measures such as the removal of current lower earnings limit and opening up of Auto Enrolment to 18-year-olds, will prevent future generations from sleeping walking into retirement while thinking that their savings will be sufficient to support them in later life.
“Given the current economic conditions are putting pressure on both corporate and personal finances it will be important to carefully consider how these changes can be implemented. Given it is most likely that such changes would be phased in over a number of years we believe that it is important for the decisions to be made in the very near future.”