PLSA comments on AE Review | PLSA
PLSA comments on AE Review

PLSA comments on AE Review

18 December 2017

The Pensions and Lifetime Savings Association commented on the Department for Work and Pensions Automatic Enrolment Review.

Graham Vidler, Director of External Affairs at the PLSA said:

“Today’s announcement is an important step on the road to helping people save enough for retirement. By increasing the salary band on which people are saving, and extending automatic enrolment to younger workers, more money will be going into pensions. The PLSA has long argued that automatic enrolment should cover more people and that contributions should rise, ideally to 12% over the next decade. The new measures, plus the commitment to review contributions after 2019, marks real progress and we look forward to supporting the Government in implementing the policy.”

Age Threshold:

“We are particularly pleased to see Government taking on board our proposal to reduce the age threshold from 22 years-old to 18 years-old as the earlier people start saving the better their retirement will be.  The changes suggested today will have a material impact on younger people’s pension savings.  Indeed, the changes to the age threshold and the removal of the lower earnings limit would see someone who started saving at 18 years old build a pot of 15% more than someone who started saving at 22 years old.”

Removal of Lower Earnings Limit:

“This is a major change that will mainly benefit lower earners.  While lower earners will be asked to put proportionately more of their earnings into a pension, they will also benefit from a proportionately greater employer contribution.  For someone earning £12,088, this will mean almost doubling their total pension contribution** or an immediate 3% pay rise.

Self- Employed:

“Between 2001 and 2015, the number of self-employed people who contributed to a pension scheme fell from 1.1 million to 380,000 so it is vitally important that we tackle this challenge before it becomes even more serious***.  The review appears to recognise the complexity of this issue and we feel that pilot projects with the self-employed are the right way forward.   We look forward to engaging with Government to find a durable solution.”


“Ultimately, the best and simplest way to improve retirement outcomes is for people to put more into their pensions.  However, it seems prudent to ensure that the implementation of the automatic enrolment increases in 2018 and 2019 happen smoothly and we take the opportunity to learn from the process.   We welcome the Government’s Commitment to review legal minimum contribution limits after 2019.  The PLSA has consistently called for contributions to rise to 12% in the 2020’s and it is crucial that the savings culture in the UK continues to grow.”



Lee Blackwell, Head of Media and PR, Pensions and Lifetime Savings Association
T: 020 7601 1726, M: 07713 073023, E: [email protected]
Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1748, M: 07901 007713, E: [email protected] 


* = We took someone on earnings of £12,088 who started their pension at 18 and compared them to someone who started saving into a pensions at 22.   For the person who started saving at 18, their final pension fund was £99,600 and the person who started saving at 22, had £86,800.  This is a substantial difference and reflects 4 years additional saving as well as compound investment growth.  This was developed using the NEST calculator.
** = For a person who is earning £12,088 (60th Percentile – Annual Survey of Hours and Earnings – ONS), the removal of the lower earnings limit would see their employer contributions increase from £3.57 to £6.98 per week and their own contributions increase from £4.76 to £9.30 per week. 
*** = Office for National Statistics, Table PEN3, link, 2017.


We’re the Pensions and Lifetime Savings Association; the national association with a ninety year history of helping pension professionals run better pension schemes. Our members include over 1,300 pension schemes with 20 million members and £1 trillion in assets, and over 400 businesses. They make us the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.
Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.

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