Milestone stage date for automatic pension enrolment
Today marks the final staging date in the automatic enrolment scheme for pensions, which means that all employers have a legal requirement to start the process to ensure that by 1 July 2018, all eligible workers are enrolled into a workplace pension scheme
1 Feb 2018
Following the 1 February staging deadline, which requires the smallest size of businesses to enrol staff into workplace pensions, the next significant milestone is 6 April 2018, when employers and employees will see their pension contributions increase under phasing.
The Pensions and Lifetime Savings Association (PLSA) said its analysis suggests automatic enrolment has been successful in reversing the decline in workplace savings.
Nigel Peaple, deputy director defined contribution (DC), lifetime savings and research at the PLSA, said: ‘More than five years on from the launch of automatic enrolment and we now have 9m more people saving into a workplace pension, with lower than expected worker opt-out rates and higher levels of employer compliance.’
The PLSA is currently analysing responses to its recent consultation Hitting the Target, which looked at options to encourage saving, such as introducing ‘national retirement income targets’ to help stimulate public debate on adequacy, and act as a guide for planning for retirement, help individuals plan for retirement, and act as a guide to public policy. The research, which is due to be published later this year, also looked at whether an increase in the level of minimum automatic enrolment contributions – beyond those already planned – is desirable and, if so, whether contributions could be increased without discouraging people from saving.
Peaple said: ‘Whilst it’s important to recognise the hard work that has been put into automatic enrolment, it’s vital we don’t become complacent. There remains an important communications challenge for government, the industry and employers to ensure that people do not opt-out of their scheme when their pension contributions rise in April and that current and future generations continue to strive towards a better income in retirement.’
Report by Pat Sweet