{"id":7831,"date":"2025-07-19T09:03:11","date_gmt":"2025-07-19T09:03:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/7831\/"},"modified":"2025-07-19T09:03:11","modified_gmt":"2025-07-19T09:03:11","slug":"labour-to-reject-pension-shake-up-that-could-have-cost-firms-more-than-1billion","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/7831\/","title":{"rendered":"Labour to reject pension shake-up that could have cost firms more than \u00a31billion"},"content":{"rendered":"

A forthcoming review will address what experts say is a pensions ‘timebomb’ as millions are failing to save enough – but is not expected to include a fresh raid on firms\"ExpertsExperts say the majority of workers are not saving enough to give them a decent retirement income(Image: Getty Images\/iStockphoto)<\/p>\n

Labour is set to reject calls to force firms to hike the amount they pay into workers\u2019 pensions<\/a>.<\/p>\n

The government will on Monday unveil the second phase of a review designed to shake-up the pensions system. Experts warn the UK faces a pensions \u201ctimebomb\u201d, with millions of people failing to save enough to give them a decent living in retirement. Industry chiefs have argued one way to tackle the problem should be to increase auto-enrolment minimum contributions. Automatic enrolment was introduced in 2012 to combat the chronic issue of workers not saving for old age. Staff are automatically added to their employers\u2019 pension scheme, unless they deliberately opt-out.<\/p>\n

\"PensionsPensions minister Torsten Bell had already indicated auto-enrolment levels would not change (Image: Roger Harris Photography)<\/p>\n

Currently, employers contribute at least 5% of their salary and workers a minimum of 3%. The pensions industry has long called for the combined 8% to be increased – potentially to 12%.<\/p>\n

But doing so risked being seen as a fresh raid on business, coming after the row over Chancellor Rachel Reeves<\/a>\u2019 \u00a325billion hike in employers\u2019 national insurance contributions. Industry sources say it could have cost about \u00a31billion for every 1% increase in pension contributions.<\/p>\n

Despite recent reports, the Mirror<\/a> understands the government will double down on its commitment that there would be no increases in contributions for the entirety of this Parliament. It follows previous comments by pensions minister Torsten Bell.<\/p>\n

The pledge will likely came as a relief for companies, which already fear tax hikes in the Autumn Budget<\/a> as Ms Reeves tries to tackle a black hole in the public finances left by the Tories. But it may concern those who are looking at the review as a \u201conce in a generation\u201d chance to tackle the massive retirement shortfall. Insiders say the review will instead look at the problem in the round.<\/p>\n

\"TheThe government is under pressure to announce radical changes in new review to boost people’s incomes in retirement (Image: Getty)<\/p>\n

Mike Ambery, retirement savings director at Standard Life, argued for an even bigger shake-up, with firms and their workers paying into a pension from the first pound they earn, rather than the current \u00a36,420 starting point.<\/p>\n

\u201cThis is a ticking timebomb and something needs to happen\u201d, he said, pointing to forecasts that by the mid 2040s, over 60% of retirees won\u2019t have an adequate pension. \u201cThe government has to grasp the nettle on this,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":"A forthcoming review will address what experts say is a pensions ‘timebomb’ as millions are failing to save…\n","protected":false},"author":2,"featured_media":7832,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,2053,4178,4174,4175,229,4576,56,54,55],"class_list":{"0":"post-7831","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-labour-party","11":"tag-pensions","12":"tag-personal-finance","13":"tag-personalfinance","14":"tag-politics","15":"tag-standard-life","16":"tag-uk","17":"tag-united-kingdom","18":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/7831","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=7831"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/7831\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/7832"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=7831"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=7831"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=7831"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}