TISA’s response to the IFS Research on automatic enrolment and pension saving in the UK
TISA, the investments and savings membership association, is pleased to have supported the IFS research, ‘What happens when employers are obliged to nudge? Automatic enrolment and pension saving in the UK,’ and to have taken part in the working group considering the emerging findings.
Adrian Boulding, Policy Strategy Director at TISA said:
“The research confirms the success of automatic enrolment. Inertia has proved to be a powerful ally to pensions and we have seen millions more saving in a workplace pension as a result. It will be useful material for the 2017 Review of Automatic enrolment that Government are launching next month and to which TISA will be contributing.
“Whilst the research has found some evidence of increased membership in groups of employees not included in the statutory requirement for auto-enrolment, TISA remains concerned that 6 million people have been assessed by their employer but rejected for auto-enrolment because they earn under £10,000 pa or are too old or too young. The experience of our members is that where low earners are getting pension contributions it is because their employer has decided to enroll all staff for the sake of simplicity and not because the individuals have exercised their right to ask to join.
“The very large proportion of employees that IFS find are receiving contributions of 2% or less of their earnings is deeply troubling. In some cases that’s because the employer’s scheme only provides the statutory minimum of 2% of earnings between £5824 and £43000 pa. But it’s very worrying that IFS find that even where higher levels of contributions are available, many employees are sticking on the bottom rung to which they were automatically enrolled.
“The current statutory minimum contributions of 2% are low and this IFS research underlines how critically important the phased increases of minimum contributions to 5% in 2018 and 8% in 2019 are to the wellbeing of the next generation of pensioners.”
For further information please contact:
Alistair Kellie – Telephone: 0207 680 6558 /Email: Alistair.Kellie@newgatecomms.com
Sara Neidle – Telephone: 020 7680 6543 / Email: Sara.Neidle@newgatecomms.com
Email: TISA@newgatecomms.com
Notes for Editors
TISA is a not-for-profit membership association operating within the financial services industry. The focus of our recommendations and actions is improved outcomes for consumers and UK plc with this approach leading to a stronger UK financial services industry.
TISA’s growing membership comprises over 150 firms involved in the supply and distribution of savings and investment products and services. These members represent many different sectors of the financial services industry, including asset managers, insurance companies, fund managers, distributors, building societies, investment managers, third party administrators, consultants and advisers, software providers, financial advisers, pension providers, banks and stockbrokers.
TISA has a successful track record in working cooperatively with government, regulators, HMT, DWP and HMRC to improve the performance of the industry and the outcomes for the public. Effective policy and regulation and the creation of efficient industry infrastructure continues to be the major focus for our members. TISA is unique in that it represents the entire financial services industry, incorporating cross-sector policy, industry and technical expertise. Whilst we maintain a solid partnership with government, the regulators and wider industry, we remain independent and develop neutral views and opinions. This impartiality is reflected in our ability to drive development projects which improve industry performance and consumer outcomes, putting us in the unique position of being able to constantly challenge the status quo to bring about material improvement.