[2022] Motion 15 Auto-enrolment reforms

carried motion
Carried motion

Received from:

Congress argues that pressure needs to be kept up on the government to make sure that auto-enrolment makes pensions open to all. There are an estimated 4.8 million low-income workers excluded from auto-enrolment as they earn less than £10,000 a year in a single job, which is the auto-enrolment earnings trigger.

Many workers, disproportionately women, have multiple jobs which when added together means their total income is more than £10,000. They miss out on automatically benefiting from an employer pension contribution simply because of the way the pension rules work.

In 2017, an independent review of auto-enrolment recommended the following reforms:

i. reducing the minimum age from 22 to 18

ii. gradually removing the salary offset so that, over time, pension contributions become eight per cent of earnings from the first pound, not from £6,240.

The government accepted the recommendations and committed to implementing the reforms by the mid-2020s, but, as yet, no implementation timetable has been set.

Congress calls on the government to set a timetable to implement the reforms by the mid-2020s. This would mean that younger people would start saving for retirement sooner and the removal of the salary offset will give the biggest pensions boost to those on lower earnings, specifically women. Employers will contribute more, for more people.

Employees will also pay more, so this reform may not be welcomed right now with the current cost-of-living crisis, but this is a forward-looking reform. Setting a timeline gives employees and employers advance notice so they can plan for it.