"It is estimated that an extra £17bn a year will have been saved through auto-enrolment"by Richard Harrington / April 11, 2017 / Leave a comment
Having been Minister for Pensions for approaching a year now, I have met so many people—whether it be members of the public, charities, people from the pensions industry—who understand that pensions are something that affect everybody, whatever their age, background or occupation.
We all should be thinking about our retirement at every stage of our adult lives. Whether it is checking to see when and how much we can expect from the state; looking at our private pension savings and considering if we have as much as we want; or exploring the different options for what we can do with that money, we all need to be planning ahead and getting to know our pension.
What is most important for me in this job is doing everything possible to make sure that tomorrow’s senior citizens have the income they need to maintain the lifestyle they want in retirement. As well as action by government, that also requires people to be alive to their own pensions situation.
One of the biggest changes in policy in this area over the past decade has been the introduction of automatic enrolment—a new system under which most employees are put straight into their firm’s pension scheme. It is changing the face of the savings landscape, encouraging more people to save early and setting them on a path to a financially secure retirement. Since it was introduced in 2012, many of those saving into a workplace pension are in their twenties and thirties.
Many of this group may not have had access to a workplace pension at all before this policy was introduced and, in years to come, it will help transform their standard of living. It is estimated that an extra £17bn a year will have been saved by 2019/20.
But the change isn’t just for individuals—it’s also for businesses which have been tasked with enrolling their staff. The process began with large employers, many of which already provided workplace pensions. More recently, we’ve moved on to smaller businesses, for which the process can be more complicated, not least because they may need to establish a scheme for the first time. Over a million small and micro employers are expected to have enroled by March 2018, and we need to help them get this right.
One micro employer I met recently was clear that supporting pension…