Auto-enrolment should be promoted as a “long-term savings account” to appeal to younger generations, Pensions Minister Richard Harrington has said.

Speaking at the Trades Union Congress People and Pensions Conference today, Harrington discussed a possible route into encouraging more young people to remain in their workplace pension schemes.

While praising the success of the government’s auto-enrolment policy to date, the Minister noted that it has become “a British compromise over making pensions compulsory or voluntary.”

It was noted that as younger generations are “present-thinking” they are less likely to consider saving for retirement and so they should be encouraged to recognise auto-enrolment saving as a “long-term savings account” instead.

On the contrary, Pensions Policy Institute head of policy research Daniela Silcock suggested that getting younger generations saving for the pension should be tackled head on. People should be educated and encouraged to take an interest in pension saving from as young as childhood, she argued.

“Younger people have a higher cognitive ability and have less behavioural biases” so pensions education should begin at as young an age as possible, Silcock explained.

The Minister also suggested that there is a need to include workers who are not part of the “classic employer model” in auto-enrolment and essentially get the self-employed into the pensions system.

Furthermore, Harrington concluded that the key things that now need looking at include: the simplification of consolidating schemes, pension valuation whereby deficits appear larger than they are, predominantly at the hands of accountants, RPI and CPI indexation, the role of the Pensions Regulator and awarding the body greater powers and the Pension Scheme Bill which aims to assign greater regulation of master trust scheme and allow greater transparency on pension costs and charges.

While commending the Transparency Task Force on its work so far, Harrington stated: “This is it now for transparency”.

In addition, when asked about the triple lock, Harrington confirmed: “I see no reason that the political pledges to keep the triple lock till 2020 will be changed.”

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