Nucleus Financial reacts to auto-enrolment being extended to younger people
Rachel Vahey, product technical manager at Nucleus, said:
“There is no doubt automatic enrolment has been a resounding success so far. More than nine million people have been auto-enrolled and fewer than 10% are opting out. But we have to make sure the policy is sturdy enough to take us forward into the 2020s and beyond.
“Automatic enrolment has worked for so many people, but some have been left out in the cold. Lowering the entry age to 18 and removing the lower band limit when calculating contributions are easy ways to make sure more, for example the lower paid or those who have two jobs, have the option to start saving for retirement.
“The number of self-employed saving is falling and we need to turn this around. So it’s important to explore all the ways we can encourage this group to start saving and to save more. This is about getting people starting to save, and keeping them saving. It’s all too easy for them to put it off until a later time, when they feel their business is stronger financially.
“Crucial to how successful automatic enrolment is judged to be is how much individuals and their employers contribute to their pensions. The automatic enrolment review is an important step in clearly showing contributions need to be raised above their current level to give people the money in retirement they both expect and need. The Department for Work and Pensions now needs to move forward and put in place plans to start increasing contributions.”