Extending pension auto-enrolment

Measures designed to expand the scope of pensions autoenrolment have received royal assent. They should result in more workers becoming eligible for enrolment into a workplace pension that their employer contributes to, but on their own will not ensure that more save the 15% of pay which the TUC says is needed to fund a decent retirement.

The Pensions (Extension of Automatic Enrolment) (No. 2) Bill allows ministers to lower to 18 the age threshold at which qualifying workers are automatically enrolled into workplace pensions, and to amend qualifying earnings limits so that pension contributions are calculated from the first pound earned. Currently the obligation on employers to provide and pay into workplace pensions applies to eligible workers who are aged between 22 and state pension age and earn at least £10,000 per year.

According to a government impact assessment the measures could put an extra £2 billion into workplace pensions for the first full year of implementation. The TUC wants the measures to be followed by a timetable to raise employer contributions.