The Government should increase mandatory auto-enrolment contributions to 12 per cent, advice trade body Pimfa argues.
Responding to a consultation by fellow trade body the Pensions and Lifetime Savings Association today, Pimfa says that too much attention is still being given to participation rates in Government savings policy and not on whether enough is being saved.
Pimfa is also calling on the Government to guarantee the pension tax framework will stay as it is for at least the medium term.
Pimfa senior policy adviser Simon Harrington says: “Automatic enrolment remains the most successful policy intervention for long term savings in generations. However, we need to step back and assess what the policy actually does – this is a policy where success is measured by participation rather than adequacy of saving.
“As we reach the end of the staging profile next month, it is absolutely imperative that we shift the focus from getting to people to save more rather than save at all. It is not enough to hope that people will save more through voluntary means, all the evidence we have about consumer behaviour suggests that if the default doesn’t change, nothing will change.”
Others within the industry including AJ Bell have suggested an independent commission should be set up to decide a long-term pension tax policy.