“The DWP’s objective of helping more people into work goes hand-in-hand with its auto-enrolment policy. More people in employment means more people having access to a pension, and more importantly to an employer pension contribution. Increasing the scope of auto-enrolment to under 22s will also help. Rather than waiting until the mid-2020s to introduce this change, the DWP should be looking to implement it within four years.
“Extending auto-enrolment to the self-employed will be a hard nut to crack, but it’s good that the government is taking this seriously. The self-employed, are an incredibly diverse group, but a solution must be found to stop this growing group missing out and the pension gap between them and employees widening.
“Auto-enrolment, with its low opt-out rate of around 10% , and its progress in increasing the number of people with pension savings looks like a success. This may change as employee contributions jump to 3% in April, then to 5% in April 2019, so the government can’t afford to rest on its laurels. It needs to have an effective engagement strategy which continually talks up the value of lifetime saving and the benefits it brings.
“The latest Defined Benefit shocks, including the Carillion insolvency with its grossly underfunded DB scheme, demonstrates that the Pensions Regulator needs more powers to better protect members’ pensions. Hopefully the forthcoming defined benefit White Paper will tackle this. Another area worth exploring is how to give providers and schemes more powers to protect members against pension scams by allowing them to block suspicious transfers.
“Encouraging more people to check on their state pension is also important as many will find they are on track to receive substantially less that the full entitlement. The sooner people get a clear picture, the sooner they can consider plugging the gap through private pension saving.”
DWPs Objectives for the next four years
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