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.