Prior to the General Election being called, the Government introduced the Pensions Schemes Bill, which included many measures NOW: Pensions welcomed. Now that we are in an election period, NOW: Pensions is calling for all parties to go further and support four policy changes that would strengthen pension saving and secure the long-term future of auto enrolment.
October 2019 marked the seventh anniversary of the auto enrolment regime into the workplace, which has been one of the most successful public policy initiatives of the past decade. Since its introduction, over ten million people have been helped to save into a pension.
At this election, NOW: Pensions is calling on all parties to sign up to our four pledges for the second phase of auto enrolment, ‘Auto Enrolment 2.0’, which should begin with a new Pensions Bill in the next Queen’s Speech.
These pledges are:
- Resolve the net pay anomaly so all low earners in workplace schemes receive pension tax relief
- Introduce a “family carer top-up” to reduce the gender pensions gap
- Abolish “Qualifying Earnings” rules so that the total salary counts towards pension contributions
- Remove the £10,000 earnings ‘trigger’ rule which discriminates against part-time workers.
The Expert View: Adrian Boulding, Director of Policy at NOW: Pensions
“Since its introduction in 2012, auto enrolment has helped more than ten million people start saving for their future. This election is an opportunity for parties to set out their stalls and address some of the issues still facing pension savers. As we saw with the recent Queen’s Speech, there is cross-party consensus to keep the momentum going following the end of the first phase of auto enrolment.
“NOW: Pensions is calling for political parties to sign up to our ‘Auto Enrolment 2.0’ pledges to ensure we address some of the key issues which would further strengthen pension saving.
“The State Pension is unlikely to provide the standard of living most people expect in retirement, so every penny helps when thinking about retirement. We are therefore calling for qualifying earning to be removed to increase total contributions.
“We are also calling for action to close the gender pensions gap. The introduction of a “family carer top-up”, for example, would help about 3 million women and 300,000 men top up their pension pot. In addition, were auto enrolment contributions based on every pound of earnings, women would be the biggest beneficiaries, as 70% of part-time workers are women. According to recent analysis carried out for NOW: Pensions by the Pensions Policy Institute, such a move would more than double their pension wealth by 140%1.
“We at NOW: Pensions are working unilaterally to address inequalities for our members by committing to top up the tax relief shortfall for those affected – and we remain the only Net Pay scheme to do so”.
For more information
About NOW: Pensions
NOW: Pensions entered the UK market in 2011 with a simple and cost-effective workplace pension designed specifically with the auto-enrolment market in mind. It is one of the UK’s largest workplace pension providers with nearly two million members and tens of thousands of employers from a wide range of sectors.
1 ‘Facing an unequal future: Closing the gender pensions gap’ (July 2019)