The Pensions and Lifetime Savings Association (PLSA) comments on Richard Holden MP’s proposals to introduce a private member’s bill to extend the scope of automatic enrolment to boost the retirement savings of younger and lower earning workers.
Nigel Peaple, Director of Policy and Advocacy, PLSA said: “Automatic enrolment has seen over 10 million people newly saving or saving more for a pension in the UK. This is a genuine success story. Combined with the new State Pension, automatic enrolment ensures that many more people can meet some of the costs of later life.
“Some groups, however, are not currently within the scope of the automatic enrolment regime which limits their ability to save effectively, and the level of automatic enrolment saving is low in comparison to workplace pensions of the past. Unless more money is set aside for the purpose of retirement, future generations will find that their incomes will be insufficient to meet their retirement goals.
“The PLSA has long supported maintaining the momentum in automatic enrolment by extending it to workers under 22 and removing the Lower Earnings Limit (LEL) so that people save from the first pound of earnings. We have also maintained that in order for savers to reach an adequate income in retirement, the current 8% minimum contribution level should be increased to 12% by 2030 – split 50/50 between employers and employees.
“The PLSA also commends the intent of the proposal to remove the £10,000 earnings threshold to support workers on very low earnings or with multiple jobs, however, additional analysis may be necessary to ensure it will benefit households at all income levels.
“We therefore support the introduction of Richard Holden MP’s private member’s bill which will hopefully provide the legislative footing to extend automatic enrolment so that a greater number of savers can have an adequate income in retirement.”
Mark Smith, Senior PR Manager
020 7601 1726 | [email protected]
Steven Kennedy, Senior PR Manager
020 7601 1737 | 07713 073024 | [email protected]