Smart Pension is calling for ministers to prioritise expanding auto enrolment and to speed up the implementation of the pensions dashboard as they look to reform the UK pensions system.
These demands come in Smart Pension’s new report, Delivery 2030, which looks at how UK pensions can be improved. This report recommends a number urgent policy changes to address weaknesses in the current pensions environment that are negatively impacting savers right now. This include the changes to AE which Smart says were absent from the recent King’s Speech and Pensions Schemes Bill.
Smart is calling for a number of specific changes which include:
- Lowering the qualifying age for auto enrolment from 22 to 18, and removing the lower earnings limit so that contributions are made from the first pound earned
- Setting a clear timetable for increasing minimum contribution rates to 12 per cent
- Implementing the pensions dashboard
The changes to auto-enrolment were recommended by an earlier cross-party review, but despite the previous government accepting these recommendations, no timetable for implementation has been put in place.
The Smart report says it is important to prioritise long-term policy decision-making over eye-catching but short-termist changes. It argues that a new and independent Pensions and Savings Commission would help to formulate a long-term national savings strategy with cross-party support, and ensure that all UK savers have enough money to live comfortably when they reach retirement.
Smart Pension senior director of strategic delivery Eve Read says: “Although it was encouraging to see some further detail on reforms impacting savers positively through the recently announced Pension Schemes Bill, we were disappointed not to hear more about the pensions review mentioned in Labour’s manifesto.
“We would welcome consideration around the expansion of auto enrolment and increases to contribution rates. As detailed in our new report, measures like these are absolutely essential to ensure better outcomes and financial security for people in retirement.”
