A new report has put forward changes to auto-enrolment, including adding the self-employed to the pension system.
The research predicts that an auto-enrolment reform could result in 4.7 million more people receiving pension contributions.
The Scottish Widows 2024 Retirement Report proposes four landmark changes to the government to help UK pension savers:
- Extending auto-enrolment to the self-employed
- Lowering the auto-enrolment age from 22 to 18 years old
- Reducing or removing the earnings threshold of £10k
- Gradually raising the default pension contributions to 12%
Peter Glancy, Head of Pensions Policy at Scottish Widows, said, “The new government has a unique opportunity to hit the ground running and transform pension saving for generations to come.
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“The introduction of auto-enrolment in 2012 was a game-changer, but now it’s time to scale that up. Reducing the age threshold to 18, lowering earning limits, bringing in self-employed workers and upping default rates all build on the existing framework and would be incredibly powerful in getting more people in the UK saving enough for the future, while also looking at how people’s financial goals complement each other, rather than compete.
“This is particularly true for younger workers, but the positive impact would be felt across all ages. Indeed, it’s important to remember that by regularly contributing into a workplace pension, employers have a legal obligation to pay at least 3% if not more. This is effectively boosting future incomes. Now is the time for action and commitment to improving pension savings and this should form a pivotal part of the new government’s plans.”
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