Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • News

ABI publishes auto-enrolment 'action plan' for next decade

Open-access content Tuesday 21st June 2022
ABI publishes auto-enrolment 'action plan' for next decade

The UK government should gradually increase minimum pension contribution rates from 8% to 12% over the next 10 years, the Association of British Insurers (ABI) has recommended.

In a report published today, the trade association argues that the new minimum contributions should be split evenly between employers and employees, with the changes starting to be introduced after 2025.

With the cost-of-living in mind, it recommends that savers have flexibility, including the ability to ‘opt-down’ to pension contributions of 10%. Alternatively, a minimum contribution could be set at 10% with the option to ‘opt-up’ to 12%. 

The report highlights the “enormous success” of pensions auto-enrolment – which has brought over 10 million more people into workplace pension schemes – but adds that people still aren’t saving enough for retirement.

It also recommends that the government bring forward commitments it has already made to lower the age threshold for auto-enrolment from 22 to 18, and ensure contributions are made from the first pound earned. 

These changes were slated for the mid-2020s and need to be legislated for “as a matter of urgency”, according to the report.

Dr Yvonne Braun, director of policy, long term savings and protection at the ABI, said: “Our report describes the key steps for the next chapter of automatic enrolment and sets out specific recommendations to adapt and evolve the policy. 

“We also need to see more people engaging with their pension savings, which is why the industry has come together to launch the Pensions Engagement Season. 

“By paying more attention to their pension, people will be able to understand if they’re saving enough and what actions they might need to take if they’re not.” 

Auto-enrolment requires that all employers automatically enrol employees who are over the age of 22 and earn at least £10,000 a year into a workplace pension scheme.

However, the government's own research suggests that reducing the auto-enrolment threshold to £5,000 would bring over 800,000 individuals into the scope of auto-enrolment, of which around three-quarters would be women.

To further boost pension saving and help close the gender pension gap, Hymans Robertson recently recommended that the government introduce 'auto-enrolment credits' for career breaks.

This could be done in conjunction with two further measures: substantially reducing the auto-enrolment earnings threshold to include more women on lower/part-time salaries, and removing the offset in qualifying earnings from the first £1.

Hymans Robertson partner, Chris Noon, said: “It’s becoming increasingly clear that one of the primary shortcomings with the UK pensions framework is in the retirement outcomes for women, compared to those enjoyed by men.

“Introducing state auto-enrolment credits, alongside other measures to extend auto-enrolment, would make a significant difference in addressing the inequality. The government simply can’t ignore this inequality which is blatantly unfair to millions of women.”

 

Image credit: iStock

Author: Chris Seekings

Filed in:
News
Topics:
Pensions

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ