Opperman confirms govt commitment to introduce AE reforms in mid-2020s

Pensions Minister, Guy Opperman, has reaffirmed the government’s commitment to implementing the 2017 Automatic Enrolment Review recommendations in the “mid-2020s” to expand coverage of the auto-enrolment initiative.

Commenting in response to a written parliamentary question, Opperman stated: “We are committed to implementing the 2017 Automatic Enrolment Review ambitions in the mid-2020s, lowering the age for being automatically enrolled from 22 to 18 and abolishing the automatic enrolment lower earnings limit, so that contributions are payable from the first pound of earnings.

“In this way we will expand coverage of the successful workplace pension reforms and increase the amounts being put into retirement savings by millions of workers, particularly younger people and lower earners.

“The 2017 review report was clear that implementation will be subject to learning from previous workplace pension contribution increases, discussions with employers and others on the right approach, and finding ways to make these changes affordable.

“We will do this in light of the impact of the pandemic and our overall support for economic recovery, while continuing to support long-term saving, balancing the needs of savers, employers and tax-payers.”

The government has previously committed to a mid-2020s timeline for auto-enrolment reforms, including as a way to address the pensions gender gap, with Opperman also previously suggesting that the reforms could be included in a potential second pensions bill, should this be introduced.

Whilst Opperman's recommitment to the timeline has been welcomed, Aegon head of pensions, Kate Smith, warned that this deadline is "fast approaching", with much groundwork still to be done.

“The mid-2020s are fast approaching and realistically there is still a lot of work to be done before these can be implemented including building consensus, especially against a backdrop of increasing national insurance contributions from April 2022 for both employers and employees," she stated.

“If the changes are to be effective from the mid-2020 the work needs to start now to build a consensus, agree a timeline and draft the legislation to make this happen.”

    Share Story:

Recent Stories

Pensions Age podcast: buy-outs and buy-ins for member and employer nominated trustees
Pitfalls and good practice when approaching insurers with Pensions Age editor, Laura Blows, Martin Parker (Just Group) and Akash Rooprai (ITS)
Climate change and board diversity
Pensions Age editor, Laura Blows, speaks to State Street Global Advisors global head of asset stewardship strategy, Robert Walker, about the company’s stewardship priorities for the year.