While providers have encouraged saving, the government recently launched a Pensions Commission to help create a fair, sustainable system for the mid-21st century. Its final report is due in 2027.
“We welcome the commission, but 2027 feels too far off,” said Tessa Page, UK wealth strategy leader at Mercer. “There’s an urgent need to act now, quick wins shouldn’t wait. The UK’s growing savings gap won’t fix itself.”
Lowering auto-enrolment thresholds
One potential quick win is lowering the auto-enrolment age from 22 and scrapping the lower earnings threshold. Currently, most workplace pension contributions apply only to earnings between £6,240 and £50,270.
The Pensions (Extension of Automatic Enrolment) Act 2023 allows for these changes, but they haven’t been implemented yet.
“Removing the lower earnings limit would especially benefit lower earners—many of whom are women—by allowing them to contribute a greater share of their income to pensions,” says Hannah English, head of DC corporate consulting at Hymans Robertson.
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