The Department for Work and Pensions has hit its target of bringing 10 million workers into occupational pensions, a year ahead of schedule.
To give that figure a sense of perspective, 10 million is pretty much the entire population of Sweden.
The final stages of the programme’s roll out concluded last year, with contributions to an individual’s pension pot rising to 5%.
April 2019 will see that contribution rise further to 8%, including a 5% minimum employee contribution.
Auto-enrolment began in 2012 when the proportion of private sector workers opted into a pension was at a low of 42%. That figure has almost doubled to 81%, a dramatic cultural sea change for which AE is being credited.
Speaking to Professional Pensions, pensions and financial inclusion minister Guy Opperman said: “Ultimately, our ambition is to bring earnings thresholds down so that people can start saving from their first pound earned. Together, we’re building a more secure financial future for Britain and I’m proud to be at the heart of it.”
However, stepping back we still have 9.2 million workers not enrolled into a pension scheme. Michelle Highman, chief executive of The Money Charity, says: ‘If we’re honest, none of us spend as much time planning for our futures as we should. But there’s a clear problem in working hard and being comfortable now if we’ll then leave ourselves in trouble later in life. Those are the years when the majority of us will hope to be most comfortable, as well as when we may most need help.
‘That’s why the successes of auto-enrolment and the plans for the pensions dashboard are to be wholeheartedly welcomed, with strong crossover with our message of financial capability. However, clearly there is still much to be done, ensuring people do not fall through the gaps in pensions provision, as well as engaging people with being financially capable in planning for all times and circumstances of life.’
Where is the dashboard?
The next big step in reforming how we all think about our finances is bound to be the roll out of the pensions dashboard. This is still listed as a ‘prototype project’ since the government asked the Association of British Insurers to lead the dashboard’s development in Spring 2017. Updates can be found on their website: https://pensionsdashboardproject.uk
The launch has been earmarked for some time in 2019; we will update as soon as we can.