Today (Wednesday), a report by Onward shows that extending pensions auto-enrolment to everyone aged 18+ and for part time workers would add around £2.77 Trillion to the pensions savings of British workers.
In Parliament this afternoon (Wednesday), Richard Holden, MP for North West Durham, will seek to introduce a Private Members Bill to extend auto-enrolment for pensions to millions of younger and part-time workers.
Since auto-enrolment into pensions was introduced in 2012 by the Conservative-led Coalition Government, the amount of people saving towards a pension in addition to their state pension has increased from 46.5% to 77.6%. At present auto-enrolment is however limited to workers aged over 22 who earn over £10,000 a year. This excludes many part-time workers who earn below the threshold and also means that the half of young people who start work or an apprenticeship at 18 do not get the benefit of auto-enrolment for the first four years of employment.
Today’s report by Onward highlights the significant benefits that extending auto-enrolment would bring to the pensions of millions of British workers:
- The changes would mean that UK workers pension pots would swell by £2.77 trillion. This would help provide long-term security for millions more pensioners, levelling-up their retirement as well as providing a steady stream of patient, long-term capital for investment across the UK.
- Currently, just 57.8% of part-time workers are contributing to a pension versus 86.4% of full-time workers. Women are far more likely than men to be in part-time work and to have multiple part-time jobs. This change would close the gap between men and women’s pension savings dramatically, helping millions more have healthier, happier and a more secure retirement.
- While part-time workers across the United Kingdom would benefit from these changes, constituencies outside London, would benefit most, with: Mansfield (Nottinghamshire), Workington (Cumbria), Hyndburn (Lancashire) as well large parts of the South West, the Midlands, and North of England set to benefit the most.
Examples of how low paid workers would benefit are included in the attached report. They include someone currently working part time in two jobs, each paying £190/week seeing their pension pot triple over their lifetime with these changes to almost £300,000.
Richard Holden MP has been working with Onward on these proposals and is today seeking to introduce a Private Members Bill in The House of Commons to extend these auto-enrolment rights to younger and part-time workers. He has already been backed by 11 fellow 2019 intake Conservative MPs (the maximum number allowed) to introduce his ten minute rule bill in Parliament.
Richard Holden, MP for North West Durham said:
“Auto-enrolment has been one of the massive hidden triumphs of the last decade in the UK, but sadly millions of hard-working British people aren’t benefitting because they’re under 22 or simply not working enough hours. I want to change that.
”In 2017 the Government said that it would look at extending auto-enrolment by the mid-2020s but to hit those dates we need legislation now to make it happen and allow business time to phase in these important changes. That’s what my Bill will do.
“Nothing could show clearer intent towards long-term levelling up than ensuring that everyone who works hard will see a safer and more secure retirement and I hope that the Government backs my campaign for action now.”
Will Tanner, Director of Onward UK said:
“Extending auto-enrolment to everyone would achieve two of the Government’s key objectives in one fell swoop. It would massively boost the savings rates of some of the least well off in society and it would unlock billions in capital to be deployed towards levelling up and boosting growth.
“Even better, it is a simple, well-understood system that already exists, meaning reform would be uncontroversial and straightforward to achieve. The Government has already indicated it will look at this; it is time to make good on those promises.”