Opperman faces pressure to speed up AE changes

Pensions Minister Guy Opperman has faced cross-party pressure to speed up the government’s pledged changes to auto-enrolment, outlined in its 2017 AE review.

In a House of Commons debate on the auto-enrolment lower earnings limit yesterday, 13 March, Scottish Nationalist Party MP for Paisley and Renfrewshire, Mhairi Black, questioned the government’s reasoning for delaying its decision to scrap the lower earnings limit in particular.

The government recommend a number of proposals in its AE review, most notably lowering the lower earnings limit of those eligible to be automatically enrolled from the first pound earned, as well as lowering the age limit of those eligible from 22 to 18. It said it would look to introduce the changes in the mid-2020s.

Opperman said: “I accept that there will be pressure today, as members have made clear, to do this much sooner.

“There is a serious point that the House needs to consider; we all celebrate the successes of auto-enrolment but it would be naive and wrong to say that it is an utterly done deal yet.”

He added that it would be wrong of the government to seek change the basis of auto-enrolment before assessing how the rise to 8 per cent contributions in April has gone.

“This is quite a complicated process; it will genuinely take the best part of nine months to go through all the data and get a definitive understanding of where we are on the 8 per cent. At best, I will not know the degree of opt-outs until Christmas,” he said.

“It seems utterly wrong for me to seek to change the nature of the legal basis until I have a real understanding of the impact of the 8 per cent increase.”

Responding to Opperman’s comments, Black said that the evidence “already suggests we are heading in the right direction” and that the changes are working.

According to Trade Union Congress research, a six year delay in scrapping the limit could limit a savers’ pension pot by £12,000.

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