The next government has been urged to adopt a five-point plan to combat current issues with pensions.
Workplace pensions provider NOW: Pensions outlined five measures for the new pensions minister to implement, including removing qualifying earnings from pension contributions, helping low earners to qualify for auto-enrolment and creating a "cross-party consensus" on automatic transfers.
The five-point plan is:
1. Abolish "qualifying earnings" by ensuring contributions are calculated based on the entire salary. Currently the band set by the Department for Work and Pensions to calculate auto-enrolment contributions is between £5,772 and £41,865.
2. Allow low earners to qualify for automatic enrolment because at the moment only those earning at least £10,000 can benefit from auto-enrolment. NOW: Pensions said: "While 5.1 million of workers had been auto-enrolled into pensions by the end of January, an almost identical number had been excluded from pension saving, mostly on the grounds that they do not earn enough to qualify."
3. Establish a "cross-party consensus" on automatic transfers. The firm agreed with the idea of automatic pension pot transfers but said transfers should only be allowed to schemes verified as "meeting strict standards such as the Pensions Regulator's master trust assurance framework or the National Association of Pension Funds' Pensions Quality Mark".
In addition, the firm urged the next government to raise the pension pot limit for transfers from £10,000 to £25,000.
4. Consider auto escalation. NOW: Pensions said the next government should consider "auto-escalation" - a concept where employees increase their pension contributions automatically in line with pay rise. The firm said: "As with auto-enrolment they have the right to opt out, but auto-escalation has the behavioural advantage that workers do not miss money they have never had."
5. Provide flexibility to younger generations. The firm argued flexibility should be given to young people to withdraw savings to help fund a deposit for their first home. NOW: Pensions said: "With many young people being deterred from pension saving as they struggle to get a foot on the property ladder, giving greater consideration to initiatives such as these would be well worthwhile."
NOW: Pensions CEO Morten Nilsson said: "With the general election just two months away, we could soon have a new pensions minister. The outgoing administration should be applauded for its excellent work on auto-enrolment, charges and governance, but there are a number of pressing issues that should feature on the new minister's to-do list."