Select committee: Work and Pensions Committee
Conclusion 2
Third Report - Protecting pension savers – five years on from the pension freedoms: Saving for later life
Published 30 Sep 2022
Paragraph 26
Addressed to Department for Work and Pensions
Work and Pensions Committee Protecting pension savers – five years on from the pension freedoms: Saving for later life All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
Many newly auto-enrolled people make minimum contributions, not realising that this will not be enough to give them an adequate living standard in retirement. The Pensions Commission designed auto-enrolment to get median earners part of the way to its definition of retirement adequacy, with the expectation that they would make additional voluntary savings on top. However, largely they have not done so. Recent analysis by the Pensions Policy Institute for B&CE showed that only 39% of households and 37% of individuals are on track to hit the target replacement rates used by the Pensions Commission to benchmark adequacy. A group at particular risk, is people in their forties and older who do not have access to a defined benefit pension (a pension that pays benefits based on salary and length of service) and have had limited time to build up a pension through auto-enrolment.
From: Work and Pensions Committee, Third Report - Protecting pension savers – five years on from the pension freedoms: Saving for later life (HC 126), paragraph 26, 30 September 2022
Government response
The government responded to the whole report on 23 January 2023 (deadline 30 November 2022).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government "notes" the Committee's report and responds to each recommendation in turn, committing to implement the 2017 Automatic Enrolment Review measures while declining several proposals.
- On the 2017 Review, it remains "committed to the implementation" of its ambitions "in the mid-2020s" and aims to bring forward legislation "at a suitable opportunity and when parliamentary time allows", with a consultation on implementation.
- It declines to consult on a plan for older savers without Defined Benefit pensions, saying "We do not believe now is the right time to consult", and does not support trialling automatic Pension Wise bookings.
- It states that "a new office is necessary" is not its view: the government "does not believe that a new office is necessary" to build the evidence base on retirement adequacy.
- On the gender pensions gap, it is developing a definition and says any target "could only be considered once a suitable definition has been agreed upon".