TISA urges Pensions Commission to set timetable for raising minimum Auto Enrolment contributions to 12%
The Investing and Saving Alliance (TISA) has urged the Pensions Commission to recommend a clear timetable for raising minimum Auto Enrolment contributions to 12%, warning that continued delay will leave millions of savers facing inadequate retirement incomes.
In its response to the Commission’s interim report, TISA also calls for an auto-enrolment styled pension-saving framework better suited to the self-employed and those working multiple jobs, as well as greater encouragement for voluntary saving.
Renny Biggins, Head of Policy: Products & Long-Term Savings at TISA, commented:
“Auto Enrolment has transformed participation, but simply getting people into the system is not enough. Millions are still contributing at levels unlikely to provide an adequate retirement, and every year we fail to address this increases the challenge for future savers, employers and government.
“The next phase of reform must help more people save enough for retirement while recognising they have very different incomes, working patterns and opportunities to save. A more inclusive and adaptable system is essential if the benefits of pension saving are to extend beyond those in traditional, stable employment.”
TISA recommends that the Pensions Commission:
- Set a clear timetable for increasing minimum Auto Enrolment contributions to 12% over six years, while allowing flexibility for different incomes and circumstances.
- Develop an Auto Enrolment-style solution tailored to the self-employed, including flexible contribution arrangements that reflect fluctuating earnings.
- Promote auto-escalation and employer matching to encourage higher voluntary saving, particularly among those with limited time to address retirement shortfalls.
- Improve access for low earners and people with multiple jobs, including reviewing the earnings trigger and how combined earnings are treated.
- Align its final recommendations with the developing landscape of AI, Guided Retirement, Value for Money, pension dashboards, small-pot consolidation and wider regulatory reform.
Biggins added:
“The Commission is designing policy for a pensions system that is already changing rapidly. Its final recommendations must fit coherently with new forms of consumer support, advances in AI and major reforms already under way, rather than adding further complexity to a fragmented landscape.”
ENDS.
Notes to editors
- A full copy of TISA’s response is available on request.
- TISA is a not-for-profit membership organisation committed to improving the financial wellbeing of all UK consumers by working collectively with the financial services industry to deliver solutions and champion innovation, for the benefit of people, our industry, and the nation.
- TISA has approximately 260 member firms involved in the supply and distribution of savings and investment products and associated services. Members include the UK’s major investment managers, retail banks, online platforms, insurance companies, pension providers, distributors, building societies, wealth managers, third party administrators, FinTechs, financial consultants, financial advisers, industry infrastructure providers and stockbrokers.