More than eight in 10 (83%) Moneywise.co.uk users believe the pension auto-enrolment age should be reduced, according to the results of our latest poll.
Currently, auto-enrolment only kicks in at the age of 22. But the government announced plans in December 2017 to lower this age to 18 by the “mid-2020s”.
The government says it wants to help “more people to save while they are working, so that they can enjoy greater financial security when they retire” – and it seems Moneywise users agree.
Over half (54%) of those who voted said the age should be reduced as it’s important to start saving for a pension as early as possible.
However, while nearly three in 10 (29%) also said the auto-enrolment age should fall, they did say that whether young savers can afford to contribute to a pension is an issue.
A further 9% went further and said the pension auto-enrolment age shouldn’t drop as young people are unlikely to be able to afford to start a pension.
At present, the minimum you must pay in under auto-enrolment is just 0.8% of your “qualifying earnings” – either the amount you earn before tax between £5,876 and £45,000 a year, or your entire salary before tax – which method depends on your employer.
But April 2019 will see the minimum employee pay-in rise to 4%, and when financial provider Scottish Widows asked 22- to 29-year-olds if these increases would affect how they save, fewer than half (48%) said they would stay enrolled.
An additional 5% of those who voted in our poll said the auto-enrolment age shouldn’t be reduced as the government should focus on helping other pension savers instead, such as the self-employed who don’t currently benefit from the scheme.
The government is testing ways in which the self-employed could be auto-enrolled, via ‘touch points’ with organisations such as banks or labour contractors.
See the full poll results in the pie chart below.