View more on these topics

Cass Business School: Misselling fears stop auto-enrolment extension to low earners


Cass Business School professor David Blake says the Government fears a misselling scandal if it extends auto-enrolment to include all lower earners.

Speaking at a Strategic Society Centre debate on pensions contributions today, Trade Union Congress pensions policy officer Helen Nadin re-iterated calls to widen auto-enrolment qualifying and earnings bands to take contributions from the first pound of pay.

Currently auto-enrolment contributions kick in above the personal allowance level, which currently stands at £9,440 and is due to rise to £10,000 in April.

Blake said: “The reason it doesn’t happen is because the Government is concerned about misselling. It is concerned that if poor people are effectively soft compelled to join a scheme they could end up far worse off with no means tested benefits and their money becomes worthless.

“That was part of the calculation but if we can get over that it would be great to get people saving more at a lower level. There will always be those waiting to say auto-enrolment is a disaster.”

Association of British Insurers head of savings and retirement Yvonne Braun backed allowing contributions from the first pound as a “dramatic simplification”. She said any move would need to be accompanied by an advice or guidance service to stop low earners being detrimentally affected.

But Department for Work and Pensions deputy director of pensions and ageing Adrian Richards said extending auto-enrolment could increase complexity.

He said: “It is very complex and it is costly for advice at the lower end. For those employers with part-time workers on small incomes, they are not paying tax or national insurance contributions, so it adds a complexity to them that they may not want.”



Pensions Regulator: Maintaining contributions in a high-volume world

Automatic enrolment is a game changer with more employers and employees contributing to pensions than ever before. As the massed ranks of smaller employers reach their staging dates, we expect to have increasing numbers of workers in defined contribution schemes. It is vital we get the blocks in place now to help maintain the flow […]

Simon Collins: Are all your staff up to the job?

The scenario: You are the compliance oversight CF10 officer of a busy independent investment intermediary. It is nearly six months in to the RDR and after reviewing your independent status and adviser charging regime, things appear to be going well.  You prioritised those two key aspects of the RDR as all of your advisers had […]


FCA hits Sesame with £6m fine

The Financial Conduct Authority has fined Sesame £6m for failing to ensure investment advice was suitable and for failings in the systems and controls that governed the oversight of its appointed representatives. The fine is made up of £5.8m for systems and controls weaknesses in its investment business and £245,000 for advice in relation to […]

Pension regulator’s order to police auto-enrol will open legacy can of worms

Experts say The Pensions Regulator’s decision to force providers to police automatic enrolment contributions will see legacy schemes come under greater scrutiny. Last week, TPR published a draft code of practice setting out the role of pension scheme managers, including providers, in monitoring auto-enrolment contributions. The code requires providers to put in place risk-based processes […]

Simon Fletcher

Auto-enrolment: pay attention or pay the price

By Simon Fletcher

As a chief executive officer of a business in the financial services sector, I have been dealing with the introduction of auto-enrolment for our clients for some time, but I can also speak from an employer’s point of view, having to go through the process ourselves.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm