The UK’s largest pensions companies and the thinktank Onward have written to the Chancellor to urge him to widen access to auto-enrolment to younger people, part time workers and those on lower incomes. In the letter, Onward, Aviva and other leading pension firms warn that too many people miss out on the benefits of auto-enrolment and urge the Government to ‘level up pensions for everyone’ by extending the scheme’s scope by the mid-2020s.
They are calling for:
- A reduction in the age that people can begin saving through auto-enrolment from 22 to 18 years.
- Phased abolition of the £6,240 lower earnings limit to make it easier for lower income and part-time workers to save for their retirement.
Emma Douglas, Director of Workplace Savings & Retirement at Aviva said:
“We welcome the recent freeze in the lower qualifying earnings limit (LET) as we support a phased approach to its eventual removal. Recent events, including inflation hitting record highs and the increased cost of living, means that it will be a financially challenging year for many, and long-term savings might not feel like a priority. So, we are calling on government to put a ‘roadmap’ in place now for how and when it will implement the removal of the LET and reduce the minimum age threshold to 18 years old for automatic-enrolment. There is never a ‘perfect time’ to increase pension contributions, but a phased approach should help to ease any sudden financial impact on employers and employees.”