Overview

This Bill aims to expand the UK's automatic enrolment pension scheme. It lowers the minimum age for automatic enrolment from 22 to 18 and removes the lower earnings threshold, meaning more people will be automatically enrolled in a workplace pension.

Description

The Pensions (Extension of Automatic Enrolment) Bill amends the Pensions Act 2008. Key changes include:

• Lowering the minimum age: Automatic enrolment will now apply to all employees aged 18 and over, rather than just those aged 22 and over.
• Removing the lower earnings threshold: The bill eliminates the minimum earnings requirement for automatic enrolment. Previously, only those earning above a certain amount were automatically enrolled; this threshold is now removed.
• Automatic Re-enrolment Changes: The age for automatic re-enrolment is also lowered from 22 to 18, ensuring continued participation in the pension scheme.

Government Spending

The bill is expected to increase government spending on the pension system. The exact figures are not specified in the bill itself; however, the cost will depend on the number of newly enrolled individuals and their contributions which in turn will increase the payments made through the auto-enrolment scheme.

Groups Affected

This bill will primarily impact:

• Employers: They will be responsible for enrolling more employees in pension schemes, leading to increased administrative burden and costs.
• Employees aged 18-21: These individuals will now be automatically enrolled in workplace pensions, benefiting from the long-term savings and security.
• Lower-earning employees: Previously excluded due to the earnings threshold, these individuals will now benefit from automatic enrolment and workplace pension contributions.
• Pension providers: An increase in the number of members is likely to increase their workload and administration but may also increase profits.

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