Young people in work could be £30,000 better off in retirement under proposed auto-enrolment age changes
dailyrecord.co.ukA former Conservative minister has said that lowering the age threshold for automatic pension enrolment could make young workers £30,000 better off in retirement.
Tory MP Jonathan Gullis said his plans to reduce the age of Auto-Enrolment to 18 would be “transformative” for future pensioners.Employers must currently automatically enrol workers into a pension scheme and make contributions if they are aged between 22 and State Pension age and earn at least £10,000 a year.
Reforms backed by Mr Gullis aim to extend Automatic Enrolment to workers under the age of 22 and reduce or repeal the lower earnings limit to qualify.The UK Government’s intention is to reduce the lower age limit to 18, according to the Pensions (Extension of Automatic) Enrolment (No.
2) Bill. Urging the Commons to back the Bill, Mr Gullis said: “Extending eligibility age to 18 will support younger workers and provide them with the opportunity to begin saving from the start of their working lives for a more secure retirement.”He added: “Removing the lower earnings limit will proportionally benefit the lowest earners the most.“It simplifies the process and for just a few pounds a week, through the power of compound interest, people could be £30,000 better off in retirement.“This would be absolutely transformative, which is why this Bill is so critical.”The Bill recently cleared the Commons unopposed and will now be considered by the House of Lords before it can become law.
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