The Pensions Extension of Automatic Enrolment Bill has passed through the House of Lords and is anticipated to become law following its third reading today.
The passing of the bill means that the age for automatic enrolment will be reduced from 22 to 18 years of age and the lower earning threshold for contributions will be removed.
The next stage for the bill to officially become law is to receive Royal Assent but the date for this is yet to be confirmed.
According to a spokesperson, the House of Lords will go on recess starting on Thursday, September 21, and will reconvene on Monday, October 16. Therefore, if the bill does not receive Royal Assent this week, it will be in October.
People’s Partnership director of policy Phil Brown says: “As an organisation which has long called for improvements to Automatic Enrolment, this is great news for a generation of savers, meaning that younger workers will be able to save for longer, potentially allowing earlier retirement than would otherwise have been possible.
“Making pension savings count from the first pound earned will significantly increase the proportion of earnings saved, particularly for those with lower earnings. It’s important that this happens at a time when earnings are rising faster than inflation so that people do not face a choice between stopping saving and being able to afford to live as they do now.
“Looking ahead, the Department for Work and Pensions need to review the adequacy of UK pension saving and start setting targets for what they think the combination of automatic enrolment contributions and the state pension should achieve. People need to know what sort of lifestyle they can expect in retirement from the two main pillars of our pension system.”
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