Master trust Now Pensions is calling for the government to set a timeline for auto-enrolment reforms and to scrap the £10,000 earnings trigger, saying 300,000 more people have become ineligible for a workplace pension during the pandemic. However, not everyone agrees that private pensions should be the priority when it comes to policymaking. 

 

At the start of the year, Conservative Richard Holden MP proposed a private member’s bill that would extend automatic enrolment to those earning less than £10,000 from a single job, as well as legislating for the reforms the government said it would introduce in the mid-2020s – abolishing the lower earnings threshold and lowering the auto-enrolment age from 22 to 18. The second reading of the bill is due to take place on 25 February. 

 

Holden said young people and part-time workers are currently unfairly excluded from pension saving. ”In 2017 the Government said that it would look at extending auto-enrolment by the mid-2020s but to hit those dates we need legislation now to make it happen and allow business time to phase in these important changes,” he said in January.  

 

 

Also last month, the Work and Pensions Committee published its second report as part of its inquiry into the pension freedom reforms, finding numerous areas for improvement for government and regulators. 

 

Responding to the report, master trust Now Pensions has now published a “manifesto to make pension policy changes to help improve the retirement outcomes for millions of people who are currently missing out”, calling for the government to implement the policy proposals set out by Holden, which would extend the Auto-Enrolment Review’s recommendation by scrapping the earnings trigger. It also wants the government to confirm a timeline for this. 

 

Now said its research from December 2021 shows there are 300,000 more people who are ineligible for workplace pension saving since the start of the pandemic, bringing the total number of people missing out on a workplace pension to almost 3m. 

 

“As we reflect on the past 10 years of auto-enrolment and the huge success it has played in getting over 20 million people in the UK saving for their later life, it is now time that the government took action to ensure that everyone in the UK has a fair opportunity to save via a workplace pension,” said Now chief executive Patrick Luthi.  

 

“The benefits of saving via a workplace pension are clear as the member benefits from contributions from their employer as well as possible tax relief from the government. As we look ahead to the next 10 years, now is the time to fix these obvious and detrimental inequalities,” he added. 

 

 

However, there is not universal support for increasing contributions to private pensions. Commentator Henry Tapper said for most people, the state pension makes up the bulk of retirement income and should take precedence when it comes to policy fixes. 

 

“There are competing priorities and right now the priority is sort out the state pension,” he wrote in a recent blog. Tapper pointed to high inflation – which state pensioners are compensated for, with a delay – as well as IT systems problems that led to thousands of people being underpaid their pension, and the need to ensure future state pension age increases properly reflect demographics. 

 

“Until we can afford to keep our poorest pensioners in basics, we cannot afford to boost the private savings system called auto-enrolment as a priority,” he wrote. 

 

The state pension is undergoing its second review, led by a Conservative peer, to consider recent trends in life expectancy and the metrics to use to share costs fairly, among others.