Auto-enrolment inquiry to explore boosting savings

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Auto-enrolment inquiry to explore boosting savings

The public accounts committee today (9 November) launched an inquiry into automatic enrolment in the workplace.

The MPs will look at how the Department for Work and Pensions will ensure that more widespread enrolment translates into higher retirement incomes.

The committee stated: “The government faces significant challenges in ensuring that people have adequate incomes in retirement.

“People are living longer and fewer have been saving into workplace pension schemes than in the past.

“Automatic enrolment aims to reverse the long-term decline in the number of people saving into workplace pensions.

“The Department for Work and Pensions, The Pensions Regulator and The National Employment Savings Trust have worked together to introduce the automatic enrolment programme, doing so successfully for large and medium-sized employers who account for around 20 million workers.

“They now face a greater challenge as 1.8 million smaller employers are required to enrol their workers by 2018. Programme spending is so far on track and opt-out rates have been lower than expected at between 8 per cent and 14 per cent.”

The inquiry was launched after last week a new report from the National Audit Office stated there are significant risks ahead for the roll-out of automatic enrolment.

Amyas Morse, head of the NAO, said: “Significant risks remain; the volume of smaller employers will impose significant pressures and DWP will need to ensure that more widespread enrolment translates into higher retirement incomes.”

The NAO added that the longer-term success of the programme will depend on its ability to stimulate higher retirement incomes, while the DWP will also need to monitor the way the programme interacts with wider pension and welfare reforms.