Pensions Auto-enrolment Lower Earners 2024-12-16
2024-12-16
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Questions & Answers
Q1
Partial Answer
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Context
Auto-enrolment has seen a significant increase in the number of employees saving into workplace pensions, but around 10% opt out due to low pay and cost-of-living pressures.
Due to the introduction of auto-enrolment, there has been a 92% increase in the number of employees saving into workplace pension schemes since 2012. However, around 10% of people automatically enrolled choose to opt out due to low pay and cost-of-living pressures, leaving them losing out on both their contributions and employer top-ups. Would the Minister consider allowing employer contributions to continue in cases where individuals opt out?
I thank my hon. Friend for that question, which is indeed an interesting idea. It is one that was put forward recently by the Institute for Fiscal Studies, and I will consider it.
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Assessment & feedback
Did not provide a specific commitment to implementing the proposal or a timeline for consideration.
Will Consider It
Response accuracy
Q2
Partial Answer
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Context
Many people opt out of workplace pension schemes due to low pay and cost-of-living pressures, leading them to miss out on employer contributions.
The Minister will be aware that around 10% of people automatically enrolled into workplace pension schemes choose to opt out. Would the Minister consider a simple tweak to allow employer contributions to continue in cases where individuals opt out?
I thank my hon. Friend for that question, which is indeed an interesting idea. It is one that was put forward recently by the Institute for Fiscal Studies, and I will consider it.
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Assessment & feedback
Did not provide a specific commitment to implementing the proposal or a timeline for consideration.
Will Consider It
Response accuracy
Q3
Partial Answer
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Context
Low-income individuals often cannot afford to participate in pension schemes due to the cost of living.
Both parties have encouraged people to buy pension contributions, but for many low earners, it is not possible to have a pension scheme and at the same time live. What can the Minister do to encourage people to participate in pension schemes without impacting their income?
A number of ideas have been put forward by think-tanks and research institutes. One such idea is a sidecar savings account, which could be used for a pension but also set aside money for emergencies. We are considering that.
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Assessment & feedback
Did not provide specific measures or timeline to encourage low-income individuals to save for pensions without impacting their income.
We Are Considering That
Response accuracy