09 Dec 2022
Pension automatic enrolment is nearly 10 years old; do you think it has been a success? Do you think it’s time for the rules to change?
These are questions I am quite often asked and, in my opinion, yes, pension automatic enrolment has been a success in making more people save for their retirement.
Following its introduction in 2012, 10.7mn employees had been automatically enrolled into workplace pensions as of June 2022. This is good right?
However, despite auto-enrolment’s success many people – including women and low-paid or part-time workers – are missing out on vital retirement savings due to not qualifying to be auto enrolled in their pension schemes
Furthermore, ten years after auto-enrolment came into force, a September 2022 report from the Work and Pensions Committee says the UK “risks a crisis in future, as many people realise they do not have enough for an adequate income in retirement only when it is too late to do anything about it”. The hands-off approach instilled by automatic enrolment simply means some members are not saving enough. https://www.gov.uk/government/publications/workplace-pensions-and-automatic-enrolment-employers-perspectives-2022
And despite the accomplishments of auto-enrolment being based on members joining their company scheme, many members are not engaged with their pension and do not take any action or make any choices about their pension.
So what will have to change to ensure that all workers are not missing out on these vital retirement savings and how can we help pension members engage with their pension?
The same report says that that the government must intervene to update the auto-enrolment regulations by the following measures:
– to incorporate workers over the age of 18
remove the lower earnings limit on auto-enrolment
gradually increase minimum contributions from 8 per cent to 12 per cent
allow all workers, including temporary, part time workers and jobs filled by independent contractors and freelancers to join.
There is no deadline for introducing these changes.
It is also recognised that Member Engagement needs to be improved so that members understand and know what to expect from their pension.
Well, this is exactly where we can help at Wingate with the launch of Wingate Engage. Wingate Engage provides employees with a platform to help them identify whether they are on track to achieve their retirement goals and encourages greater engagement with their workplace pension. The system provides employees with a ‘pension score’ to encourage them to remain engaged with their pension, this score is influenced by employees completing of their personal profile and engagement with educational content, and 121 pension meetings.
If you are keen to find out more about how Wingate could help you and your employees or would like a demonstration of this exciting new system, please contact the Wingate team on 01883 332260 or at email@example.com