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You can find the current article at its original source at https://www.theguardian.com/commentisfree/2017/dec/16/nearly-a-million-young-people-are-about-to-start-saving-for-retirement-thanks-to-auto-enrolment
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| Nearly a million young people are about to start saving for retirement | Nearly a million young people are about to start saving for retirement |
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| Since William Beveridge produced his landmark report that ultimately became the foundation for our modern welfare state, the British workplace, economy and society look vastly different. | Since William Beveridge produced his landmark report that ultimately became the foundation for our modern welfare state, the British workplace, economy and society look vastly different. |
| This is no more apparent than with pensions, where every government in recent memory has faced the challenge of engaging people in saving for retirement. | This is no more apparent than with pensions, where every government in recent memory has faced the challenge of engaging people in saving for retirement. |
| Life expectancy since Beveridge’s era has increased significantly. When the modern state pension was introduced in 1948, a 65-year-old could expect to spend 13.5 years in receipt of it – 23% of their adult life. This has been increasing ever since. In 2017, a 65-year-old can now expect to live for another 22.8 years, or 33.6% of their adult life. | Life expectancy since Beveridge’s era has increased significantly. When the modern state pension was introduced in 1948, a 65-year-old could expect to spend 13.5 years in receipt of it – 23% of their adult life. This has been increasing ever since. In 2017, a 65-year-old can now expect to live for another 22.8 years, or 33.6% of their adult life. |
| We have improved the state pension system and raised the retirement age to reflect this positive trend. But while the state pension is a critical foundation for people’s financial security as they age, it must be supplemented with other forms of retirement income. That is why, in 2012, we introduced the forward-looking automatic enrolment policy, which obliges employers to offer a workplace pension to their workers, and contribute a portion of each pay cheque towards their retirement. | We have improved the state pension system and raised the retirement age to reflect this positive trend. But while the state pension is a critical foundation for people’s financial security as they age, it must be supplemented with other forms of retirement income. That is why, in 2012, we introduced the forward-looking automatic enrolment policy, which obliges employers to offer a workplace pension to their workers, and contribute a portion of each pay cheque towards their retirement. |
| Since 2012, automatic enrolment has brought millions of people into a workplace pension for the first time, thanks to the support of businesses and employees across the UK. And the impact of automatic enrolment has been felt far and wide. For instance, in the private sector, the savings gender gap has been closed and the number of people with a workplace pension has increased by 23% since 2012. By 2019-20, an extra £20bn will have been saved as a result. | Since 2012, automatic enrolment has brought millions of people into a workplace pension for the first time, thanks to the support of businesses and employees across the UK. And the impact of automatic enrolment has been felt far and wide. For instance, in the private sector, the savings gender gap has been closed and the number of people with a workplace pension has increased by 23% since 2012. By 2019-20, an extra £20bn will have been saved as a result. |
| Five years on, we want to build on this success to make sure that automatic enrolment is truly reflective of modern working practices and that everyone who could benefit from a workplace pension has the opportunity to do so. | Five years on, we want to build on this success to make sure that automatic enrolment is truly reflective of modern working practices and that everyone who could benefit from a workplace pension has the opportunity to do so. |
| I want the United Kingdom to be the best place in the world in which to grow old | I want the United Kingdom to be the best place in the world in which to grow old |
| On Monday, I will be outlining the future direction of automatic enrolment – setting out an ambitious plan for how we can build on our success over the coming years. A key part of this will be to ensure that the next generation of workers have the same opportunities as everyone else to save when they start their first job. That is why we will extend automatic enrolment to people from the age of 18, bringing them into the savings habit early. This change will see an extra 900,000 young people start saving for retirement and add an extra £800m to pension pots. | On Monday, I will be outlining the future direction of automatic enrolment – setting out an ambitious plan for how we can build on our success over the coming years. A key part of this will be to ensure that the next generation of workers have the same opportunities as everyone else to save when they start their first job. That is why we will extend automatic enrolment to people from the age of 18, bringing them into the savings habit early. This change will see an extra 900,000 young people start saving for retirement and add an extra £800m to pension pots. |
| Another part of this will also be looking at how we can support those with multiple jobs. | Another part of this will also be looking at how we can support those with multiple jobs. |
| To do this, workplace pension contributions will be calculated from the first pound earned, rather than from a lower earnings band. This will bring additional money into pension saving, improve incentives for people in multiple jobs, where opting in would mean they get an employer contribution for every pound they earn in every job. This is also good news for employers, as it simplifies the way employers assess their workforce and calculate contributions. | To do this, workplace pension contributions will be calculated from the first pound earned, rather than from a lower earnings band. This will bring additional money into pension saving, improve incentives for people in multiple jobs, where opting in would mean they get an employer contribution for every pound they earn in every job. This is also good news for employers, as it simplifies the way employers assess their workforce and calculate contributions. |
| It is also important that we look to address the problem of the 4.8 million self-employed people under-saving for their retirement. Beginning with the launch of targeted interventions, including through the tax return process, we will look to find simple and efficient ways in which we can support people to save. | It is also important that we look to address the problem of the 4.8 million self-employed people under-saving for their retirement. Beginning with the launch of targeted interventions, including through the tax return process, we will look to find simple and efficient ways in which we can support people to save. |
| I want the United Kingdom to be the best place in the world in which to grow old. By ensuring that as many as possible have the opportunity to build up a decent private income for later life we will be well on the way to achieving this. | I want the United Kingdom to be the best place in the world in which to grow old. By ensuring that as many as possible have the opportunity to build up a decent private income for later life we will be well on the way to achieving this. |
| David Gauke is secretary of state for work and pensions | David Gauke is secretary of state for work and pensions |