The latest declaration of compliance report produced by the Pension Regulator is a timely reminder of the shortcomings of auto-enrolment as we head towards 2017 and its inaugural review.
- Of employers to have adopted auto-enrolment, 6,155,000 workers remain on the sidelines
- This equates to more than 1 in 4 workers
- In the main, those earning under £10,000 per annum – effectively those working part-time - are missing out
- 265,000 staff have been swept back into pensions as part of their employer’s 3 year re-enrolment, representing just 2% of total workers
Nathan Long - Senior Pension Analyst at Hargreaves Lansdown:
"A sizeable chunk of employer workforces are being frozen out of saving for retirement and that is before we even begin to address the issues afflicting the self-employed.
In the main, part-time employees are missing out which tends to discriminate against women who are more likely to take these roles. The demands of modern living mean the flexibility of both self-employment and part-time roles will continue to grow in popularity. Failure to incorporate these groups into pension saving could spell disaster for an otherwise successful policy.
Priorities for the Government’s 2017 auto-enrolment review should be to lower the level of earnings at which employees are put into a pension and to include the self-employed in automatically saving for retirement. A reduction in the level of earnings needed to be auto-enrolled to that of the New State Pension would be sensible."
NOTES TO EDITORS
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