Automatic Enrolment pension scheme to be expanded to young and low earners

The Department for Work and Pensions (DWP) has given its backing to proposals to expand the Automatic Enrolment pension scheme to include younger and lower-earning workers.

Plans, set out in a Private Members Bill by Stoke-on-Trent MP Jonathan Gullis, will see the Lower Earnings Limit for contributions abolished and the age reduced for being automatically enrolled to 18 years old.

It is hoped the changes could help to normalise saving for retirement for younger workers by introducing it at the very start of their working lives. Removal of the Lower Earnings Limit will also ensure those on lower incomes can easily save, as well as protecting those working multiple jobs for missing out.

Minister for Pensions, Laura Trott, said:

“We know that these widely supported measures will make a meaningful difference to people’s pension saving over the years ahead.

“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.”

Jonathan Gullis MP, 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.”

Should the bill pass through Parliament, it will give the Secretary of State the power to amend both the age limit and lower qualifying earnings limit for Automatic Enrolment, subject to a statutory consultation on plans.