Auto enrolment age to be lowered

By Kieran Drew
In January 15, 2018
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The qualifying age for automatic enrolment into an employer’s pension scheme is currently 22 years, but a new proposal plans to reduce the age to 18 by the mid 2020s.

The change will affect about 900,000 young people and will encourage higher savings in preparation for the younger generation’s retirement. The aim is to create a “habit” of saving that will stay with individuals throughout their working life.

But is the mid 2020s soon enough? This risks leaving a whole group of young people behind when it comes to pensionable savings and there have been calls to bring this new proposal forward. I think the original struggle and disorganisation of auto enrolment has meant that those in charge want to be fully prepared for any further changes to the scheme.

Whilst there are positives to this move, if you are a business owner it will mean an increase in pension costs, as it did when the auto enrolment scheme was introduced originally. Something to keep in mind over the coming years.

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