Automatic enrolment has reversed the decline in workplace pension saving. Latest figures show that nearly 9.2 million people have been automatically enrolled; with participation amongst eligible women in the private sector increasing, from 40% to 73%, to equal the rate for men. By 2019/20 an estimated extra £20 billion a year is estimated to go into workplace pensions as a result of automatic enrolment.
In addition the Government have introduced the National Living Wage and raised the personal tax allowance helping low earners. Thanks to these changes, a single person working 35 hours per week would take home £12,500 after income tax and national insurance – over £3,300 more than in 2010.
The Government’s recent review of automatic enrolment, which can be viewed at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/668971/automatic-enrolment-review-2017-maintaining-the-momentum.PDF, set out proposals to strengthen the workplace pension reforms, including for lower earners. By removing the lower earnings limit for those with low earnings or who have multiple jobs, those workers will have their pension contributions calculated from the first pound earned. In addition, all savers will be able to get an employer contribution regardless of their earnings. This will bring an extra £2.6 billion per year into pension saving.