Family Law

The Department for Work and Pensions (DWP) has now released a policy paper with the results of its review into automatic pension enrolment in 2017. The policy paper sets out the government’s proposals to maintain the momentum it has seen in recent years and to ‘build a stronger, more inclusive savings culture for future generations’.

The government carried out a review of automatic enrolment in 2017 to consider how to build on its success for the future, with a key focus being for individuals to keep saving and to save more after minimum contributions reach 8% in 2019.

The review examined three main areas:

• the existing coverage of automatic enrolment and whether or not this remains appropriate over the longer term;

• the evidence base concerning future contributions and how this can be strengthened; and

• how engagement can be improved so that individuals have a stronger sense of ownership and are better enabled to maximise pension saving.

In its review of the automatic enrolment scheme, the government has announced a number of key proposals, including:

• lowering the age criteria for auto-enrolment from 22 to 18, bringing a further 900,000 young people into automatic enrolment;

• calculating pension contributions from the first pound earned rather than from a lower earnings limit; and

• testing targeted interventions to identify the most effective options to increase pension saving among self-employed people.

The Government says that going forward:

• its ambition is to implement these changes to the automatic enrolment framework in the mid-2020s;

• it will monitor the impact of the increases in minimum contribution rates in 2018 and 2019 to inform discussions with stakeholders about future contribution rates;

• it will begin testing targeted self-employment interventions in 2018 with a view to evaluating them in 2019 to inform implementation options and costs, and will examine whether current legislation and/or guidance requires clarification around the eligibility of workers in atypical ways or in non-standard forms of employment to be automatically enrolled; and

• the DWP will report on the feasibility study for the Pension Dashboard in spring 2018, while the Single Financial Guidance Body will be in place after autumn 2018.

The DWP has also issued three other publications alongside the policy paper:

• an analytical report setting out the analysis and findings used to inform the automatic enrolment review 2017;

• its automatic enrolment evaluation strategy 2017, which provides a framework for evaluating the effectiveness of automatic enrolment beyond 2017; and

• the supporting analysis for its review of the earnings trigger and qualifying earnings band for 2018/19.