Labour MP and chairman of the Work and Pensions Committee Frank Field has criticised the government in the wake of what he called its “less than bold” Automatic Enrolment (AE) Review.
On Monday, the government released the review, which laid out the details of what it would like to see from AE in the future, and described its successes and failures so far.
The review included the government’s plans to scrap the AE lower earnings limit and extend the programme to 18 year-olds, although the changes will not take effect until the mid-2020s.
The 10 key points from the AE review
Field said the plans were a timid move from a government that had previously been “bold” in this area. “AE was a bold leap by the government, which has been hugely successful in getting millions of people to start saving in pensions,” he said.
“But this review shows none of that boldness in announcing a few minor tweaks and tentative pilot schemes. The analysis accompanying the report shows 12 million people are under-saving for retirement, including a growing army of the self-employed.
“It is time for the government to revert to bold type in building on its past successes.”
‘Not social norm’
Aegon head of pensions Kate Smith also voiced some criticism. “The government has stopped short of making AE the social norm for every single UK employee,” she said.
“Those earning less than £10,000 will still need to make an active decision about whether they wish to opt into their workplace pension scheme and benefit from employer contributions – removing the earnings trigger altogether would have treated them like any other employee.”
She added that, although conversations on how to help the self-employed save for retirement are set to kick off in 2018, a solution still felt far away.
Currently, the self-employed do not come under the AE umbrella, and as such are generally not saving enough into their pensions. In July, the Taylor review suggested they should be auto-enrolled into a pension scheme through the self-assessment process.
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