The Society of Pension Professionals has proposed creating a ‘bronze’, ‘silver’ and ‘gold’ tiered kitemark for pension contributions, to raise public awareness that the 8% minimum contributed through auto-enrolment is not enough. 

The SPP made the proposal in its response, published on Wednesday, to the Pensions Commission’s interim report. 

“Pension adequacy is one of the most defining financial challenges of our generation. We cannot rely on an approach that has a track record of being ineffective, with over 15m people not saving enough for their retirement. We need an actionable framework that changes public psychology, supports employers, and ensures structural fairness across every generation and career path,” said David James, who chairs the SPP’s DC Committee and sits on its Adequacy Working Group.  

Under the proposals, the bronze level would be set 50% higher than the current minimum at 12% total contributions, with employer contributions phased higher to 7% and employee contributions remaining at 5%, or alternatively split equally at 6%. The silver level would denote a 15% combined contribution, with the SPP suggesting that 9% to 10% would need to come from the employer. The gold level – 20% contributions – would function largely as an aspirational target aiming “to change people’s psychology and expectations”. At this level, employees would contribute no more than 7% or as little as 5%.  

The society said it recognises that such contribution levels would raise challenges for some employers but that delay would result in more people retiring without enough funds.  

“Accordingly, we recommend that certain steps start as soon as practicable but that the main cost elements only come in progressively. The interval is a great opportunity for public education,” the SPP said.  

Other suggestions include ways to enrol the UK’s 4m self-employed workers, such as an opt-out mechanism administered by HMRC or a state-backed default pension scheme.

To address the growing gender pensions gap, it suggests employers should contribute at normal levels during parental leave, as well as reviewing the auto-enrolment thresholds which mainly exclude women from saving. In addition, it said the government should make paying into a partner’s pension more attractive by giving higher tax relief where higher rate taxpayers pay into a basic rate taxpayer’s pension, and should explore the creation of joint pension products, similar to joint bank accounts, giving thought to how they would need to be structured around decumulation and for when the relationship ends. It notes that collective defined contribution schemes could introduce a spouse’s pension or be set up as unisex schemes.  

For the ethnicity gap, the group said better communication is needed from both the state and industry, “tailored to factor in likely misconceptions and cultural caution” around pensions.  

The government should also improve access to work for disabled people and consider a carer’s credit to improve adequacy, the SPP suggested, as well as increasing the £2,880 tax relief threshold for pensions of non-earners, which has not been increased in over 25 years.