Auto-enrolment is back under scrutiny with the DWP launching an inquiry into the subject. You can examine what bothers  them from this link.

Here are the terms of reference for us to comment to them on

• To what extent do minimum AE contributions need to increase?
• How should any contribution increase be shared between employers and workers?
• What are the trade-offs for employers and workers between current needs and long-term savings? How might policy design help balance them?
• What would be an appropriate timetable for any increases?
• Is there also a case for reducing or removing the lower earnings limit on contributions and/or the earnings trigger for auto-enrolment?
• To what extent are employers and the public persuaded of the need for contributions to increase?

It is interesting what doesn’t bother them. They do not seem very interested in the self-employed. I’ve received this note from a union pension officer.

I’m very concerned that the Pension Commission / DWP solution to poor retirement outcomes for the self-employed will be to automatically enrol them (somehow or other!) into DC pension schemes.

But this would be a disaster for most of them (there is no employer contribution and the tax incentive for basic rate payers is negligible) – most of them would be financially much worse off. From meetings I’ve had with NEST and others, I think there’s a failure to understand how the system would impact the self-employed (they just think that more pension contributions is automatically good).

I wrote the following article (for my boss to submit!) for Pensions Expert. (It proposes a state solution or a product with the same tax treatment as a Lifetime ISA – tbh a CDC solution also seems possible / better!). I’m just trying to get this message across to policymakers.