Official figures reveal UK workers face retirement regrets due to low pension scheme contributions. 10 May 2018 According to official figures the number of UK employees participating in workplace pensions has reached a record high. The Independent has reported that experts are concerned that savers face a shock if their contributions do not increase but stay at minimum levels. Official data from the Office for National Statistics (ONS) shows the proportion of employees who contribute to a workplace pension has increased by almost a quarter since the introduction of automatic enrolment in 2012. Five years ago, only 47% of employees were in a work place pension scheme, this has increased to around 73 per cent in 2017. Despite the increase in numbers contributions have stayed close to the minimum levels required.
In April, the minimum overall contribution rate to an automatically enrolled pension rose from 2 per cent to 5 per cent of an employee’s qualifying earnings. This will rise again in April 2019 to 8 per cent.
Information reported by ONS in 2017 found that employee contributions were contributing less than 1 per cent of pensionable earnings, and only around one in three employees were contributing 3 per cent or more. This is a reduction on average contribution rates since 2012.
This could leave savers facing a tougher retirement than they thought.
Read the full press release here
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The Pensions Regulator Stakeholder Update 14 May 2018
The Pensions Regulator (TPR) have published their Corporate Plan for 2018 to 2021 setting out the key priorities and budget for the year ahead.
The plan sets out how they will evolve and explains what they are going to do to become a clearer, quicker and tougher regulator. Over the following year they intend to become clearer on their expectations of schemes and employers and use a wider range of regulatory tools to act to ensure schemes are kept on the right track and improve outcomes for retirement savers. Ensuring employers meet their ongoing automatic enrolment duties is already in action but is also a key point mentioned in the plan. There are points that relate to more recent developments, such as delivering the new authorisation and supervision regime for master trusts and working with the Government to implement the proposals set out its White Paper ‘Protecting Defined Benefit Pension Schemes’. Another key point of the plan is delivering the Pensions Regulator of the future (TPR Future). Many stakeholders have provided input into ‘TPR Future’ work, which has helped shape their ideas. TPR are now moving into the implementation phase of this project, and you can expect to hear more from them in the summer, including how they intend to improve their oversight of the pensions sector and adopt a broader range of regulatory approaches.
A busy year ahead, TPR would like to hear from you if you have any comments on the Corporate Plan or the work of TPR. You can contact them at Stakeholder@tpr.gov.uk
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The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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