29 September 2017
Auto-enrol pensions ‘to be extended to 16-year-olds’
Mandatory workplace pension schemes could be extended to youngsters from the age of 16, a newspaper has reported.
According to the Daily Telegraph, the Department for Work and Pensions (DWP) plans to announce the removal the lower age for auto-enrolment schemes before the end of 2017.
Since 2012, every employer in Britain has been obliged to enrol qualifying staff into a pension scheme and pay contributions towards it. Presently, auto-enrolment applies to anyone over the age of 22 who is earning more than £10,000 a year.
Removing the lower age limit could see business costs rising as hundreds of thousands of young people become entitled to employer's pension contributions.
The DWP has not disputed the newspaper's claim and say a review is ongoing. The department says it will be reporting on the outcome of the review in due course and the Telegraph states this will be before the end of the year.
Steve Webb, a former pensions minister and now retirement expert at Royal London, told the paper: "Auto-enrolment has been a success but attention is now turning to the people who are being excluded.
"We're always telling people to start saving at the youngest age they possibly can, which is why it feels wrong to tell 19-year-olds 'pensions are not for you'."