Young workers losing up to £76,000 in pension savings due to auto-enrolment delays
Young workers losing up to £76,000 in pension savings due to auto-enrolment delays
Posted by theipaper
Young workers losing up to £76,000 in pension savings due to auto-enrolment delays
Young workers losing up to £76,000 in pension savings due to auto-enrolment delays
Posted by theipaper
2 comments
Thousands of workers across the UK are missing out on [tens of thousands of pounds in pension savings](https://www.google.com/url?client=internal-element-cse&cx=011782314020777428663:ycznkklrfq5&q=https://inews.co.uk/topic/pensions&sa=U&ved=2ahUKEwi71sCJuKCNAxW7cfEDHRtjE28QFnoECAcQAQ&usg=AOvVaw2r8XkImMYjHlPtcozFLKXp&fexp=72957003,72957002) because the Government is yet to implement long-promised reforms to automatic enrolment, experts have warned.
Speaking at the Pensions Age conference, insurance company Aon sounded the alarm on how delays to lowering the age and earnings thresholds for auto-enrolment are stopping younger workers from growing their pension pots.
It found that had these changes been implemented four years ago, a typical 22-year-old could have an additional £76,000 in their [pension by retirement](https://inews.co.uk/category/inews-lifestyle/money/pensions-and-retirement?ico=in-line_link).
Currently, workers are only automatically enrolled if they are aged 22 or over, and earn more than £10,000, and only contributions on qualifying earnings between £6,240 and £50,270 are counted.
The total minimum contribution is 8 per cent, split with the employee contributing 5 per cent and the employer contributing at least 3 per cent.
Under proposed reforms, the age threshold would drop to 18, and contributions would apply from the first pound earned, removing the £6,240 lower earnings limit.
The reforms to lower the age and expand the earnings base were first proposed in the 2017 auto-enrolment review, with cross-party support and a stated intention by the-then Government to implement changes “by the mid-2020s.”
But no timeline has been put forward or legislative commitment made.
Experts, including those at Aon, are [calling on the Government](https://www.google.com/url?client=internal-element-cse&cx=011782314020777428663:ycznkklrfq5&q=https://inews.co.uk/topic/government&sa=U&ved=2ahUKEwjj6u-puKCNAxVNU6QEHVKhCu0QFnoECAoQAQ&usg=AOvVaw28d4Y7Po9we5gTiAOjJL-3&fexp=72957003,72957002) to act urgently, particularly given the cost-of-living crisis and increasing concerns about retirement affordability.
lol as if there’s going to be state pension when we retire
Comments are closed.