A massive £2.8trillion would be added to the savings of Britain’s workforce if more people were automatically given company pensions, a report claims today.
Current ‘auto-enrolment’ rules should be expanded to include all employees over 18 rather than 22 as well as those who earn under £10,000, the Onward think-tank argues.
The company claims that the initiative will benefit a large number of young apprentices and part-time workers.
Richard Holden, Tory MP and author of draft legislation is making the proposal today in order to see the reform through years ahead of the government plans.
Richard Holden, Tory MP and photographer (pictured), is today presenting draft legislation to help make this reform happen many years ahead of the Government’s plans
He explained that Auto-enrolment had been a huge hidden success in the UK over the past decade, however millions of British hard workers don’t get the benefits of it due to being under 22, or not working enough. This is something I would like to see change.
“In 2017, the government stated that they would consider extending auto-enrolment until the middle of 2020s. However, in order to achieve those dates, legislation must be passed now. This will allow businesses time to implement these necessary changes. My Bill will accomplish that.
“Nothing can show clearer intent toward long-term levelling than making sure that all who work hard have a better retirement. I am hopeful that the government will support my call for action.
The policy, which was introduced in 2012 to automatically enroll millions of workers into the pension plans run by their employers, unless they choose out of it, has seen a dramatic increase in the percentage of private savings. It went from less than half to over three quarters.
But it is limited to staff aged 22 and above and who earn more than £10,000 a year, which excludes large numbers of part-time workers as well as young employees who miss out on several years of contributions to their retirement savings.
While the Pensions (Extension of Automatic Enrolment Bill) will be presented in the Commons, it is not likely to become law unless it receives Ministerial support. The Department for Work and Pensions has no plans to increase automatic enrolment before the middle of 2020s.
The policy, which was introduced in 2012 to automatically enroll millions of workers into the pension plans run by their employers, unless they choose out of it has seen a dramatic increase in the percentage of private savings.