Webb plans review of auto-enrolment terms
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New Pensions Minister Liberal Democrat Steve Webb revealed that the scope for auto-enrolment could shrink, as he ann-ounced a review into the Nat-ional Employment Savings Trust last week.
Webb insists he is committed to auto-enrolment, as sta-ted in May’s coalition agreement. However, he says that the Government will take a “long, hard look” at Nest over the summer.
He says: “We are committed to the principle of automatically enrolling people. There are many millions who have company pension schemes but no private savings. Both parties supported the principle so we put it in the deal that we will go ahead with automatic enrolment.
“What we have said is we will review the specific way in which that is done. As you know, a contract was signed in April to set up the Nest Corporation. We have got the chance to look at that again over the summer.
“There is a break in the contract, an option in the autumn, but the commitment is to auto-enrolment. If auto-enrolment through Nest as previously envisaged still looks like the best way, we will go ahead with it. But we are going to take a long, hard look at it over the summer.”
Speaking to the Financial Times last week, Webb said: “The scope of auto-enrolment could be smaller than it is now.”
In April, Aegon called for the eligibility threshold for auto-enrolment to be doubled from earnings of £5,035 to around £10,000 and for those over 55 to be exempt in a bid to tackle the means-testing issue.
Informed Choice managing director Martin Bamford says: “We expected the new Government to look closely at Nest as both parties had been critical before coming to power. It makes perfect sense to limit the scope of auto-enrolment by increasing the threshold and exempting over-55s.”
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