Source · Select Committees · Business and Trade Committee
Recommendation 38
38
Accepted
Paragraph: 209
Mid-life MOT expansion welcomed, stressing importance of financial and health reality checks.
Recommendation
We welcome the expansion of the mid-life MOT. We agree that it is important that people in their 40s and 50s should get a reality check on their finances and health to help them make better-informed decisions about their next steps in work and prepare for retirement. We ask the Government to consider a similar scheme for people starting work, not least to highlight the importance of pension auto-enrolment.
Government Response Summary
The government highlights the success of Automatic Enrolment in increasing pension saving, including for young people, and states its ambition to expand the framework for 18-21-year-olds through legislative support for a Private Members' Bill, rather than creating a new 'mid-life MOT' style scheme.
Paragraph Reference:
209
Government Response
Accepted
HM Government
Accepted
Since its introduction, Automatic Enrolment has transformed workplace pension saving with participation amongst eligible employees in the private sector increasing from 42% in 2012 to 86% in 2021. It was designed specifically to help groups who historically have been poorly or less well served by the pensions market, including young people. In 2012, 24% of eligible employees in the private sector aged 22 to 29 were participating in a workplace pension. As of 2021, this increased to 85%, a 61-percentage point increase. The Government’s ambition is to enable 18-to 21-year-olds to start building a pension from their first day in work and to give lower earners greater opportunity to build retirement savings through implementation of the 2017 Automatic Enrolment Review measures. This is why we are supporting Jonathan Gullis MP’s Private Members’ Bill, which presents an immediate route for the legislative powers to expand the AE framework in the current Parliamentary session. The bill has passed through the House of Commons and was introduced in the House of Lords on 27 March.