Pensions industry calls for AE reform in party manifestos

Two pensions organisations have called on the UK’s political parties to include commitments to increase pensions coverage and minimum auto-enrolment contribution rates in their election manifestos.

With only 28 days remaining before the General Election, The Association of Consulting Actuaries (ACA) and The People’s Pension have both urged political leaders to spell out how they intend to improve saving levels across the UK’s workforce.

The ACA wants to see politicians promise to increase minimum auto-enrolment contributions to 12 per cent of total earnings over the course of the next Parliament and then to 16 per cent by around 2030, with costs shared between employers and employees.

It has also said that the earnings threshold must also be removed, while the auto-enrolment regime needs to be adapted to include the self-employed and those engaged in the gig economy.

The People’s Pension, meanwhile, has made similar calls and has argued that the next government must lower the eligible age for auto-enrolment to 18.

It also wants pension contributions to begin from the first pound of earnings and to see a reduction in the earnings requirement to the primary National Insurance threshold of £8,632.

ACA chair, Jenny Condron, said that all parties need to provide greater stability and long-term thinking over the UK’s various pensions, savings, social care and tax regimes, ideally with a desire to reach a cross-party consensus similar to the one that ushered in auto-enrolment.

“Politicians of all parties are shrill in their demands that the savings and pensions industry is ever more transparent in its dealings with the public,” she said.

“So, let’s have clarity and vision in this year’s party manifestos. They should broadly map out key plans for savings, pensions and social care for the next Parliament and beyond — it’s simply not right if changes of approach and tough decisions are hidden away in the long grass.

“This just leads to the public growing ever more disillusioned when the policy rabbits appear out of the hat post-General Election,” added Condron.

The People’s Pension director of policy, Gregg McClymont said that although pensions may not be a vote winner like the NHS or Brexit, it was still an issue that all politicians should care about and act on as millions of people at risk of not having enough to live on in retirement in the UK.

“The next government must work to ensure that people are saving enough for a comfortable retirement and that millions of workers — in particular women —aren’t unnecessarily excluded from auto-enrolment,” said McClymont.

“We’re calling on future ministers to stop women’s financial futures from being penalised because they choose to have children, and ask that the next government ensures savers can access all their pensions information on a one stop shop dashboard that’s operated in their best interest and free from commercial sales pitches.”

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