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Experts raise concerns over auto-enrolment delay

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Pensions minister Steve Webb has confirmed the Government will delay automatic enrolment for small employers until after 2015.

In a statement to the House of Commons, Webb (pictured) also indicated that any employer expecting to auto-enrol their staff after July 2013 could see their staging date pushed back. This would include firms with up to 3,000 employees.

Details of the revised schedule will be published early next year. Under the new timetable, companies employing up to 50 workers will not have to auto-enrol staff until after the next Parliament.

Webb said: “We will be going ahead with auto-enrolment as planned and I can confirm all businesses remain in scope.

“We have however decided to extend the current five year implementation period so that small businesses will not have to start enrolling their workers until the start of the next parliament. Never the less these revised plans will still result in more than half of all workers enrolled before the end of this parliament.

“Everybody who is due to be enrolled this side of July 2013 will see no change in their dates. We will publish a revised schedule early in the new year.”

Legal & General pensions strategy director Adrian Boulding, who was part of the three man ‘Making automatic enrolment work’ review commissioned by the DWP last year, says the delay is a “huge mistake”.

He says: “Demographically this is completely the wrong thing for the Government to be doing.

“The point of getting people to save for their retirement is that the baby boom generation are still in work, so this is their opportunity to save for retirement.

“If we delay, defer or miss this opportunity then the costs for providing pensions for that big generation are being landed on the much smaller generations following them. It is a huge mistake.”

After days of media coverage of possible changes to auto-enrolment, Shadow pensions minister Gregg McClymont attacked the changes as a “policy made in the press” and called for the Government to deliver a full ministerial statement on the changes. Commons speaker John Bercow said it was a matter for the Government.

McClymont said: “On policies made in the press, in particular the case of auto-enrolment, the Secretary of State for Work and Pensions, before he left the dispatch box said yes policy should be made in the house. Would a written ministerial statement on the changes made to the auto-enrolment be in order?”

Bercow said: “The decision as to whether a policy announcement should be the subject of a written or oral ministerial statement is always and without exception a decision for the minister.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. With credit cards being used to put food on the table, the last thing people want or need right now is more pensions. We need LOWER TAXES so that people have more of their money available to them to provide for themselves with a pushing back of the welfare state. Only when people can afford to live today will provision for the future become popular again. It’s common sense.

  2. The majority of employees will probably opt out anyway. They will simply say that they can’t afford the contribution, and the employers are hardly likely to try and dissuade them. This could fall as flat as stakeholder, in my humble opinion.

  3. Captain Birdeye, you have made a very good point. I work full time, I have just had to start resorting to using my credit card to afford food at certain points of the month as I just don’t earn enough, £10,000 per annum! gross, still pay tax and NI, so not a lot left. I am the only income into my household and am finding things so difficult, at this point I simply cannot afford any pension contributions at all. Glad that someone understands.

  4. the financial services industry has wised up to governments messing around with initiatives and legislation like this, why should companies and individuals within support initiatives like this when we all know the goalposts will be changed for political expediency (CAT standards, Sandler,CTF’s, stakeholder pensions…)

  5. Anonymous | 29 Nov 2011 10:17 am

    There should be NO income tax on incomes under 15k or possibley even higher. The tax system robs Peter to pay Paul and collection is more costly than revenue for lower earners.

    To anyone who says we should ALL pay tax, we do through Council Tax and VAT anyway, plus employer’s pay ER NI towards benefits.

  6. he should go the whole hog 1st December 2011 at 11:20 am

    and stop it altogether for people earning less than £12,500 and for companies with fewer than 20 staff

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