The government estimates that around seven million people are not saving nearly enough for retirement, with many people not saving at all!
With life expectancy increasing, people will live longer in retirement and therefore the size of their pension fund needs to be larger to sustain this.
The maximum basic State Pension for individuals retiring in the 2018/19 tax year is just £164.35* per week, the actual amount depends an individual’s NI contributions and normally at least 10 ‘qualifying years’ National Insurance are needed to get any State Pension at all. For most people without additional retirement savings, this may not be sufficient to make ends meet. It should also be considered that the government may not be able to afford to keep State Pensions at their current level in the long term.
Therefore, auto enrolment has been created in everyone’s best interest to preserve our financial future.