Select committee: Work and Pensions Committee
Recommendation 14
Third Report - Protecting pension savers – five years on from the pension freedoms: Saving for later life
Published 30 Sep 2022
Paragraph 102
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 ↗
Recommendation (the committee's words)
We heard that the level at which the auto-enrolment earnings trigger is set (£10,000) currently excludes too many people, with the result that they miss out on employer contributions and tax relief. We heard calls for it to be reduced or removed. We also heard that any such decision needed to be informed by a better understanding of the circumstances of low earners and the likely impact of any change on them. DWP plans to publish research in early 2023 which may help inform this. Following publication of this research, DWP should write to us setting out a timetable to review the level at which the earnings trigger is set and, if it is unable to do so, explain what action it intends to take to address the exclusion of low earners from auto-enrolment. We also recommend that DWP and HM Treasury continue to explore ways to bring multiple jobholders within the scope or auto-enrolment, for example, by amending the PAYE coding notice system to add an instruction to auto-enrol.
From: Work and Pensions Committee, Third Report - Protecting pension savers – five years on from the pension freedoms: Saving for later life (HC 126), paragraph 102, 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".