Work and Pensions Secretary Liz Kendall<\/a> announced on Monday she is relaunching the New Labour-era Pensions Commission to find solutions to tackle inadequate pensions savings.<\/p>\nIt will consider whether the age for auto-enrolment should be lowered and if more people could be helped to build up instant access savings alongside their pensions.<\/p>\n
And ministers confirmed minimum pension contributions would also be in the scope of the review, although no changes are expected before 2029.<\/p>\n
Currently, 8 per cent of qualifying earnings must be put into a pension when an employee is automatically enrolled into a scheme, with the employer contributing at least 3 per cent of this.<\/p>\n
Asked if minimum pension contributions could increase under the changes \u2013 impacting businesses \u2013 pensions minister Torsten Bell said: \u201cThat\u2019s for the commission to examine, that\u2019d be one of the topics they look at.\u201d<\/p>\n
He added that it was \u201cnot just about what the auto enrolment numbers are,\u201d pointing to other factors such as support for the self-employed, low and young earners and the employment rate.<\/p>\n
The Federation of Small Businesses (FSB) warned that the pensions industry \u201cmust show it deserves the trust placed in it by the last round of auto-enrolment, before demanding ever more money\u201d from firms.<\/p>\n
Tina McKenzie, policy chair, told The i Paper: \u201cWe hope this review will place the needs of small employers front and centre, as it is them who have ended up having to shoulder the burden of the reforms to date.<\/p>\n
\u201cMore than half of small employers still consider auto-enrolment to be one of the biggest hurdles they face. Government needs to be mindful about how it affects them, particularly with the impact of other employment costs weighing heavily.\u201d<\/p>\n
She said the commission should consider the administrative burden of pension changes as well as the financial cost for small firms. <\/p>\n
\u201cBuy-in from small firms is critical for any future pensions policy and these are all key factors in making sure it is successful,\u201d she added. <\/p>\n
Kendall told the audience there would be \u201cno change\u201d to the minimum contribution rates \u201cduring this parliament\u201d but said the commission had been asked to \u201cbuild consensus about adequacy over the medium and longer term\u201d. <\/p>\n
She said the commissioners would be \u201cthinking very deeply about the impact and the need to make sure that any new system works for smaller businesses and the self-employed\u201d. <\/p>\n
Kendall added: \u201cI don\u2019t want anything to [create] a problem encouraging people to retain and recruit more workers. I want our small businesses to be successful, but it is also the case [\u2026] if we don\u2019t act, the amount of pension and poverty we face will cost everybody.\u201d<\/p>\n
Rachel Vahey, head of public policy at AJ Bell, said there was a \u201cdire need for intervention\u201d to increase pension pots \u2013 but warned that a crude increase to minimum payments may not be the answer. <\/p>\n
\u201cWhile automatic enrolment has created 11 million new pension savers, many are saving the bare minimum,\u201d she said.<\/p>\n
Ms Vahey added: \u201cThe solution could be higher contribution rates. But new plans demanding employers stick their hands in their pockets once more, so soon after the national insurance hike, will be deeply unpopular.<\/p>\n
\u201cMeanwhile, many low earners would also struggle to pay higher contributions out of a low disposable income hit by inflation.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Ministers ruled out changes to the minimum pension contribution this parliament but a new commission will look at…\n","protected":false},"author":2,"featured_media":15128,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,4178,4174,4175,1394,56,54,55],"class_list":["post-15127","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-pensions","tag-personal-finance","tag-personalfinance","tag-politics-news","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/15127","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=15127"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/15127\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/15128"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=15127"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=15127"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=15127"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}