Article by Phil
The Government has just issued its pension review update in response to the recommendations made by the Department of Work and Pensions (DWP) last year.
The recommendations included an increase in auto enrolment contributions form the current level of 8%. Plus introducing auto enrolment contributions for the self-employed. And setting up an independent body to monitor the pension market. However, the Government rejected all of the recommendations and would not set a timetable to re-consider them at a later date. The reason given, was that the Governments focus was on maintaining higher wage levels which would create the opportunity for pension savings in the future.
This is despite the fact the DWP found that 12 million workers were not saving enough for their retirement. That’s 40% of the total workforce.
It seems that the Government is concerned about taking more money off workers through auto enrolment increases, at a time when it is taxing the workforce at the highest rate in history. Ober 1.3 million are about to move into the higher tax rates as a result of the tax bands being frozen until 2027 at the earliest.
Another example of Governments pension advice update being to kick the can down the road for someone else to deal with. Knowing full well that this will have a serious impact on millions when it comes to their retirement.
They also rejected the introduction of auto enrolment for the self-employed. Citing the same reasons. The concern remains the same. The self employed are also facing the highest levels of tax rises in a generation. Calls for a separate body to consider providing regular pension advice update, was also rejected. On the basis that the FCA and Pension Regulator were already in place to provide that service.
