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Do the changes to auto-enrolment go far enough to boost pension savings?

Journalist: Rozi Jones, Financial Reporter

ended 07. March 2023

Last week, DWP backed measures to expand automatic enrolment.

The changes will include requiring automatic enrolment of employees as soon as they reach 18 and applying the mandatory 8% contribution to earnings ‘from the first pound’.

Do you think the changes go far enough and will they provide a meaningful boost to workers' pension savings?

4 responses from the Newspage community

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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
These changes would be a positive step forward if the burden didn't fall on the employer. Businesses have had massive tax hikes this year and a flailing economy makes this even more difficult. If these changes were introduced at a time of fiscal easing they would be widely supported. However, there are many other barriers to adequate pension saving including the ever shrinking annual allowance and the money purchase annual allowance that is a barrier to people returning to the workforce in later life, just what the government needs.
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Helen LlewellynVerified
Director at Infinity Wellbeing
These changes will not make a meaningful difference. Those that want to be in a pension can already join from age 18 and choose to put in more. They rarely do.

With the cost of living being so high who can afford to put more into their pension? This applies to employers as well as employees as it affects them both.

I've been managing AE pensions for clients since it began.
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Luke Thompson0
Director at PAB Wealth Management
This is a good step in the right direction as the biggest factor in saving for retirement is that the sooner you start the easier it is. However, realistically most people at 18 will only earn a very small amount and with this, in mind, the amount they contribute will be minuscule.

The bigger issue is the self-employed I often speak to self-employed people who have absolutely no pension savings whatsoever and no plan to tackle their lack of savings either. Too many people feel they are invincible and won't need a pension and we need to remove the barriers to advice and get more people thinking about their plans for retirement.
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David RobinsonVerified
Co-Founder at Wildcat Law
Expect to see the number of individuals opting out skyrocket . The rationale for the original rules revolved around affordability vs long term benefit. With the cost of living crisis and people struggling to make ends meet the timing on this could not have been worse. People on the lowest of incomes simply are not going to be able to afford to make contributions and even if it could they are unlikely to see any real benefit at retirement.
The number of NEET's is also likely to be effected at a time when we are seeing a significant increase in their numbers. Companies suddenly facing an increase in their wage bills will be forced to cut back on recruitment which always hits the youngest hardest.
Unfortunately, this is nothing more than a cynical attempt to push yet more indirect taxation onto the poorest in society.