But she added: “Being auto-enrolled at work doesn’t guarantee you a good retirement, if that system is based on stock market returns that don’t deliver the expected amount. There are still big disparities in the retirement standards between those retiring on a defined contribution pension and those with far more generous, old-style defined benefit schemes.
“So not only does auto-enrolment need to be expanded to help those who are currently excluded, including the self-employed – the elephant in the room when it comes to pension provision - the contribution levels also need to be ‘levelled up’. Step one is getting more people in on the pensions act, step two is making sure it delivers something worthwhile.”
A DWP spokesperson said: “Automatic enrolment has succeeded in transforming pension saving, with more than 10 million workers enrolled into a workplace pension to date and an additional £28.4 billion per year being saved since 2012.
“The government’s ambition for the future of automatic enrolment will enable people to save more and to start saving earlier by abolishing the Lower Earnings Limit for contributions and reducing the age for being automatically enrolled to 18 in the mid-2020s, benefiting younger people, low-paid and part-time workers as they will receive contributions from their employer from the first pound earned. We want to make sure that these changes are made in a way and at a time that is affordable, balancing the needs of savers, employers and taxpayers.”
amy.austin@ft.com
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