Pensions: government backs bill
06 March 2023
The Department for Work and Pensions (DWP) supports the proposal to expand automatic enrolment which will enable many people to save more and to start saving earlier. This will have a great impact on pension savings for young people and low earners.
The Private Members' Bill permits two extensions to automatic enrolment – abolishing the Lower Earnings Limit (LEL) for contributions and reducing the age for being automatically enrolled to 18 years old. Lowering the age at which eligible workers must be automatically enrolled into a pension scheme by employers from 22 to 18 years old, will make saving the norm for young adults and enable them to begin to start saving earlier. In addition, the removal of the LEL will further boost the amount of people in a workplace pension and the amount saved for retirement.
Minister for pensions, Laura Trott said:
‘‘Doing this will see the government deliver on our commitment to help grow the economy and support the hard-working people of this country, particularly groups such as women, young people and lower earners who have historically found it harder to save for retirement.’’
Conservative MP, Jonathan Gullis said:
‘‘Auto-enrolment of pensions will benefit scores of young people in all four corners of the country, which is why I am delighted that Minister for Pensions Laura Trott is supportive of the bill.
With all the evidence of the huge positive impact it can have, it is a no-brainer that we now need to extend auto-enrolment to those aged 18 and above. I am confident this Bill will make a huge difference to people from Kidsgrove to Consett.’’
Payroll professionals should note that this Bill will not result in any immediate change and the outcomes from this proposal will be reported to inform the implementation approach and timing. The CIPP will provide further updates on the Bill once released.
The full article can be read here.
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