Commenting on the Pensions (Extension of Automatic Enrolment) Act 2023, Hannah English, Head of DC Corporate Consulting, Hymans Robertson, said:

"The cross-party consensus for extending automatic enrolment is very heartening. With increasing numbers of individuals now being encouraged through AE to contribute to a pension, it will mean that more people are beginning to save for their retirement from a younger age and increase their chances of better financial outcomes. The removal of the lower earnings limit would also bring significantly more people into AE. The current opt-in option for individuals earning below the lower earning threshold is too weak a mechanism to support retirement saving. The Gender Pension Gap report from 7 April 2022* suggests that reducing the threshold to £5,000 (from the current £10,000) would result in over 800,000 individuals being subject to AE. Of these, over 600,000 would be women.

“But these measures alone won’t be enough and it’s vital that the Government does more to help extend AE further and build on its success. We continue to call for the AE minimum total rate to be increased to 12%. Yet, what we’d really like to see is a complete overhaul of the current AE legislation, with much more done to encourage individuals to forward plan and invest in their pension, even during challenging times.

“We’ve also long been calling for a fuller range of measures to help narrow the gender pension, elderly, and ethnic minority pension gaps. To solve this, one measure the Government should provide is AE contributions for individuals taking career breaks, reflecting the value they are adding to society.”

* CBP-9517.pdf (parliament.uk)