Government proposes to extend auto-enrolment scheme to younger workers

In a new report, the government has proposed to extend its pensions automatic enrolment scheme to include younger workers.

18 Dec 2017

In a new report, the government has proposed to extend its pensions automatic enrolment scheme to include younger workers.

Under auto-enrolment, employers in the UK are required to automatically enrol all eligible members of staff into a workplace pension scheme, and pay a minimum contribution into the fund. Employees do, however, have the right to opt out.

Currently, only those who are aged between 22 and the State Pension Age (SPA) are eligible to be automatically enrolled into a pension scheme.

Government ministers plan to reduce the lower age limit to 18 by the mid-2020s, in order to increase the eligible target group and get younger workers into ‘the habit of saving’.

Commenting on the proposals, Work and Pensions Secretary David Gauke said: ‘We are committed to enabling more people to save while they are working, so that they can enjoy greater financial security when they retire. We know the world of work is changing, so it is only right that pension saving does too. This ambitious package will see more people than ever before helped onto the path towards building a secure retirement.’

However, experts have warned that lowering the age limit for pensions auto-enrolment may burden employers with additional costs. Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), stated: ‘Requiring employers to contribute from the first pound of earnings will mean that, by 2019, hundreds of thousands of small employers will have to pay up to £180 more per employee each year.

‘For employers in certain sectors, such as care and hospitality where margins are tight, this will really add up.’

Quick Links

Home | Contact us | Accessibility | Disclaimer | Help | Site map |

© 2018 Blue Spire Limited. All rights reserved.

We use cookies on this website, you can find more information about cookies here.

Contact Chichester Office

Tel: +44 (0)1243 781234
Fax: +44 (0)1243 791770
Email: chichester@bluespiregroup.com


Contact Brighton Office

Tel: +44 (0)1273 739533
Fax: +44 (0)1273 732844
Email: brighton@bluespiregroup.com

Chichester Address
Cawley Priory, South Pallant, Chichester, West Sussex PO19 1SY

Brighton Address
5th Floor Intergen House, 65-67 Western Road, Hove, East Sussex BN3 2JQ

Blue Spire Limited is Registered to carry out audit work in the UK and Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales C004152645. Professional indemnity insurance is provided by Royal & Sun Alliance Insurance Plc 9th Floor, One Plantation Place, 30 Fenchurch Street, London, EC3M 3BD and its territorial coverage is worldwide (excluding United States/Canada).
Blue Spire Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. FSA register https://www.fca.org.uk/register reference 566257. This guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at customers based in the UK