18th December 2017
The starting age for automatic enrolment into workplace pensions will be lowered from 22 to 18, under new government plans.
Auto-enrolment was introduced in 2012 and has seen participation in workplace pensions rise from 55% to 78% of all eligible employees in 2016 - an increase of around 6 million people.
Extending the scheme to include younger people will add an estimated 900,000 workers saving into workplace pensions, adding £770 million to annual savings.
As a result of auto-enrolment, the Department for Work and Pensions expects an additional £19.7 billion to be contributed to pensions annually by 2019/20.
David Gauke, secretary of state for work and pensions, said:
"For an entire generation of people, workplace pension saving is the new normal, and my mission now is to make sure the next generation of younger workers have the same opportunities.
"We are committed to enabling more people to save while they are working, so they can enjoy greater financial security when they retire.
"We know the world of work is changing, so it is only right that pension saving does too."
However, former pensions minister Steve Webb, director of policy at pensions firm Royal London, was not impressed by the "shockingly lethargic" pace of the reforms.
"Talking about having reforms in place by the mid-2020s risks leaving a whole generation of workers behind.
"Those who never got to join a final salary pension and who have only recently come into pensions through automatic enrolment need urgent action to help them build up a decent pension pot."
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