Mike Ambery, Retirement Savings Director at Standard Life, part of Phoenix Group said: “It’s now almost a year since parliament passed the Extension of Auto-Enrolment Act, which when implemented will lower the age of eligibility for auto-enrolment from 22 to 18 and enable people to save from the first pound of their earnings. While the new government outlined a raft of pensions measures in July’s King’s Speech including a renewed focus on pension scheme value for money and a strategy for tackling small pots, a timescale for auto-enrolment reform was left out and the best case scenario now is that this could be picked up as part of the second element of the government’s Pensions Review which will focus on adequacy.
“With the majority of UK workers currently under-saving, the key measures of the Act are crucial to giving people the best chance of securing a decent standard of living in retirement. The earlier people start to save, the more chance they have of benefiting from compound investment growth and saving from the first pound of earnings enables people to benefit from employer contributions, even when on low incomes. That being said, the single biggest lever we can pull to secure savings adequacy is raising minimum contributions, and we’d like to see this considered alongside the Extension of Auto-Enrolment Act in the upcoming Review.”
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