Consultation on the State Pension raises fairness concerns about auto enrolment says NOW: Pensions

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For immediate release: 13 October 2016

Commenting on the announcement today of a consultation seeking the public and representative bodies’ views on the State Pension system of the future, NOW: Pensions Director of Policy Adrian Boulding said:

“The future of the State Pension needs to be considered in parallel with the future direction of auto enrolment policy.

A major finding of the Cridland Review is that while the New State Pension will deliver equally for both men and women, it’s occupational pensions that are leading to men enjoying higher total pension income than women. The review finds that female pensioners are typically £60 a week (£3,000 a year) worse off than males, and that the situation will have got worse by the time Generation Y retires.”

Boulding continues: “There is a statutory review of auto enrolment coming in 2017 and that is a golden opportunity to address the design features that discriminate against low earners and in particular women, many of whom combine part-time work with their caring responsibilities.

Currently anyone earning less than £10,000 is excluded from auto enrolment and this disproportionately affects part time workers, carers, women and ethnic minorities.

Those that are auto enrolled are also at a disadvantage due to the corrosive impact of qualifying earnings on the auto enrolment calculation. Auto enrolment minimum contributions exclude the first £5,824 of a savers’ salary so that for somebody earning £10,000 just £4,176 count for the purposes of auto enrolment. Over a lifetime of pension saving, basing auto enrolment minimum contributions on every pound of earnings would significantly improve outcomes for all savers, but particularly women and the low paid.

The Cridland Review observes that whilst the State Pension system gives credits to carers, the occupational pension system does nothing for them, and time out of the labour market then results in lower overall pensions for many women. Maybe we need to extend the credit system so that Government contributes to the auto enrolment pensions of those with caring responsibilities to correct this unfairness.”

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For further information:

Amy Mankelow

NOW: Pensions

Tel: 0203 640 9075


Cheriton Lee

NOW: Pensions

Tel: 0203 826 1464


Notes to editors

NOW: Pensions @nowpensions

NOW: Pensions is one of the UK’s largest workplace pension providers with over a million members and tens of thousands of employers from a wide range of sectors. A subsidiary of one of Europe’s largest pension funds, Danish pension scheme ATP, 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.

NOW: Pensions was one of the first providers to achieve independent assurance of scheme quality in accordance with the master trust assurance framework (AAF02/07) introduced by The Pensions Regulator in conjunction with the Institute of Chartered Accountants in England and Wales (ICAEW).

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NOW: Pensions has a good technical infrastructure combined with a pension product suitable for our team. We couldn’t be happier with NOW: Pensions.
Martin Woods,