Commons Sense

House of Commons · Ministers' Questions

Pensions Auto-enrolment: Lower Earners

Monday 16 December 2024 · 3 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 3 Not answered 0

Key points

  • Rebecca Long-Bailey asked about allowing employer contributions to continue for those who opt out of auto-enrolment due to financial pressures.
  • The Minister thanked Rebecca Long-Bailey and said they would consider the idea proposed by the Institute for Fiscal Studies.
  • Jim Shannon asked what can be done to encourage low earners to participate in pension schemes without impacting their income.

Topics (select to filter)

Questions & Answers

Q1 Rebecca Long-Bailey Lab Salford
Benefits & Welfare
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.

Question

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?

Answer from Emma Reynolds

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.

Partly answered

Not addressed: Did not provide a specific commitment to implementing the proposal or a timeline for consideration.

How: Will Consider It

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Q2 Rebecca Long-Bailey Lab Salford
Benefits & Welfare
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.

Question

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?

Answer from Emma Reynolds

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.

Partly answered

Not addressed: Did not provide a specific commitment to implementing the proposal or a timeline for consideration.

How: Will Consider It

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Q3 Jim Shannon DUP Strangford
Benefits & Welfare
Context

Low-income individuals often cannot afford to participate in pension schemes due to the cost of living.

Question

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?

Answer from Emma Reynolds

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.

Partly answered

Not addressed: Did not provide specific measures or timeline to encourage low-income individuals to save for pensions without impacting their income.

How: We Are Considering That

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