Changes to pension auto-enrolment announced by Government

Finances and farm_38444

The Department for Work and Pensions (DWP) has published a number of recommendations, in its review of pension auto-enrolment, which will bring more people into the pension’s regime.

The review, which looked at past, present and future workplaces, made a number of headline proposals including:

  • The age at which employees can start building a retirement fund will also be lowered. Every employee aged 18 or over will be able to save into a workplace pension, as opposed to the present age of 22.
  • Removing the Lower Earnings Limit so that all contributions now start at the first pound of earnings rather than currently at the £5,876 threshold. The Upper Earnings Limit will still apply.

The review also announced that the earnings trigger will be kept at £10,000 for the 2018/19 tax year. Government will be working towards introducing these reforms in the mid 2020’s.

The NFU had raised concerns with the DWP about the inclusion of seasonal workers in pension auto-enrolment and recommended they should not be captured by this process that delivers minimal value in pensions accrued.

The Government, as part of the review, concluded that automatic enrolment should continue to apply to all employers and that no eligible worker should be excluded by virtue of the sector in which they work, or the work they undertake.

The review also considered the case for extending the postponement period but concluded that the three month period strikes the right balance between avoiding long-term detriment to an individual’s savings ability and the need to exempt workers employed for very short temporary periods.

NFU skills and employment adviser Lee Osborne said: “The NFU recognises that the issue of seasonal workers was considered during the review but is disappointed that our recommendations to the Department for Work and Pensions were not taken forward as part of their review into pension auto-enrolment.

“The current system of auto-enrolment is not working as expected for farmers and growers employing seasonal workers. These businesses face an additional administrative burden to automatically enrol seasonal workers when they only stay with the business for a limited period.

“It is resulting in workers being enrolled for a very short time on average after the postponement period. Due to the nature of seasonal work, it is unlikely that the pension pots will be accessed by these workers upon retirement.

“The NFU will continue to raise members’ concerns on pension auto-enrolment with the Department for Work and Pensions.”


Last edited on: 02:01:2018

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  • Posted by: Stuart CranePosted on: 05/01/2018 13:09:44

    Comment: With gradual increases in contributions over the next few years, doing away with the Lower Earnings limit will lead to a further cost of contributions from both employer and employee. Will we stand it? Further, will the employees stand it without an increase in wages?

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