Pensions minister Steve Webb insists the momentum behind automatic enrolment will be “unstoppable” by 2015, despite the Government’s decision to delay the reforms for employers with up to 3,000 staff.
Last week, the Department for Work and Pensions confirmed auto-enrolment will be pushed back until after May 2015 for companies with fewer than 50 employees.
Any firm due to start auto-enrolling staff after 2013, which includes employers with up to 3,000 staff, will also see their staging date delayed.
The introduction of the full 8 per cent minimum contribution rate, which was due to start in October 2017, will be delayed for all employees.
Speaking at the NAPF trustee conference in London this morning, Webb (pictured) said: “The change of moving employers with fewer than 50 employees until the next parliament was fairly incremental.
“The crucial point is around 5 million people will have been auto-enrolled by the next election. The cultural shift will be there at that point and I think the momentum of the reforms will be unstoppable.”
Webb refused to provide details of the revised schedule for auto-enrolment, which is due to be published early next year.
This follows a warning from Institute for Fiscal Studies director Paul Johnson, who led an independent review of auto-enrolment last year, that the reforms risked being put off “indefinitely” following the delay.
Responding to a question from Money Marketing about the impact the delay will have on the planned review of auto-enrolment and Nest in October 2017, Webb said: “That is probably a question for my successor but four.”
The review will consider removing the £4,200 Nest contribution cap and the ban on transfers into and out of the scheme.