Explaining what it wants to see from the 2017 review of auto-enrolment, the ABI said there should be two core priorities:
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Raising contribution levels after 2019 to ensure people have enough money for their retirement
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Ensuring all parts of the workforce benefit – in particular part-time employees, people with multiple jobs and the self-employed
Figures released by the Institute for Fiscal Studies today (available here) show the number of people with workplace pensions had increased by 4.4 million by 2015, thanks to auto-enrolment. More than 88% of private sector employees were in a workplace pension scheme and pension saving had increased by £2.5 billion per year.
Increasing the contribution levels for automatic enrolment to 8%, as is due to happen by 2019, will still leave many savers without enough money for later life. The ABI does not want any further changes to the policy in the short term but is urging the Government to use next year’s review to lay out a road map for the following years.
Yvonne Braun, Director of Long-term Savings and Protection at the ABI, said: “Automatic Enrolment has been a remarkable success so far. Pension providers have been strong supporters of the scheme from the start and they have adapted well to accommodate millions of new savers.
“But we cannot stand still, and we know that 8% of a proportion of earnings is not enough for most. Next year’s review of auto-enrolment is the right time to set out clear plans to push up contributions after 2019, and to explore how best to engage all workers with saving and planning for their retirement.”
The future of pensions policy and how best to encourage workers to save during their working lives are among issues being discussed at the ABI’s Annual Conference next week (November 22nd).
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