Private Pension Pots Young People 2025-05-12
2025-05-12
TAGS
Response quality
Questions & Answers
Q1
Partial Answer
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Context
Cross-party efforts over the past 15 years have seen improvements in automatic enrolment rates, particularly among younger individuals. However, concerns are rising about increased employer national insurance costs leading to pay freezes and potentially higher opt-out rates from pension savings.
Thanks to the introduction of auto-enrolment, millions of young people are now saving for their retirement, but I have heard worrying reports in Mid Bedfordshire that increases in employers’ national insurance, which have resulted in pay freezes, are now causing people to decide to opt out of pension savings. Does the Minister recognise that risk to pensions adequacy? If so, what is he doing to address it?
Less than 1% of savers actively opt out of saving each month, but the hon. Gentleman is completely right to say that we need to remain vigilant and ensure that opt-out rates do not rise in the years ahead. There was some more volatility in opt-out rates during the pandemic, for reasons that I am sure he will understand, but, as I say, we have been seeing those come down recently. I am happy to keep talking to him about that in the years ahead.
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Assessment & feedback
The Minister did not provide specific actions or commitments beyond general vigilance and continuing discussions.
General Vigilance
Continuing Discussions
Response accuracy
Q2
Partial Answer
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Context
Concerns are being raised about the visibility of pension funds' investments within the local economy, particularly regarding their role in supporting infrastructure development.
If we want young people, including those in my constituency, to believe in the value of long-term investing, they need to see that their pensions are helping to build the country that they live in and are not just distant markets. Will the Minister set out what steps he is taking to ensure that the Government’s pensions reforms encourage funds to invest more in UK infrastructure and hybrid companies?
My hon. Friend raises an important point. Although we celebrate the success of auto-enrolment, as the hon. Member for Mid Bedfordshire (Blake Stephenson) has just done, we must complete the job. We need bigger and better pension funds that are better able to deliver returns for their members, support our economy and invest in infrastructure and private assets in the months and years ahead.
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Assessment & feedback
The Minister did not provide specific steps or policies but acknowledged the importance of supporting UK investments.
Acknowledgment Without Specifics
Future Focus
Response accuracy