Tomorrow marks the final staging date in the automatic enrolment which launched in 2012. The Pensions and Lifetime Savings Association (PLSA) explains what this date means for savers, employers, the pensions sector and Government.
Nigel Peaple, Deputy Director Defined Contribution (DC), Lifetime Savings and Research at the PLSA, comments:
“More than five years on from the launch of automatic enrolment and we now have 9 million more people saving into a workplace pension, with lower than expected worker opt-out rates and higher levels of employer compliance. This all suggests that automatic enrolment has been successful in reversing the decline in workplace savings.
“Tomorrow marks the last staging date under automatic enrolment, which means that all employers have a legal requirement to start the process to ensure that by 01 July 2018, all eligible workers are enrolled into a workplace pension scheme.
“The next significant milestone in the implementation of automatic enrolment will be 6 April 2018, when employers and employees will see their pension contributions increase under phasing.
“Whilst it’s important to recognise the hard work that has been put into automatic enrolment, it’s vital we don’t become complacent. There remains an important communications challenge for Government, the industry and employers to ensure that people do not opt-out of their scheme when their pension contributions rise in April and that current and future generations continue to strive towards a better income in retirement.”
One of the questions in the PLSA’s recent Hitting the Target consultation was whether an increase in the level of minimum automatic enrolment contributions – beyond those already planned – is desirable and, if so, whether contributions could be increased without discouraging people from saving. Feedback to the consultation is currently being analysed and the final report is planned to be published later this year.