Press comment: £87bn saved through auto-enrolment but challenges ahead | Old Mutual Wealth
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£87bn saved through auto-enrolment but challenges ahead

15/06/2017

If you are covering the statistics on auto-enrolment participation published this morning by the Department for Work and Pensions, please see the following commentary from Old Mutual Wealth head of retirement policy, Jon Greer:

Jon Greer“A whopping £87bn was saved into workplace pensions last year. That is a huge investment in the future of UK household financial security and will help those savers enjoy greater stability and prosperity in retirement.

“But there are still many challenges ahead. While it is fantastic that there appears to be consistency in participation across all parts of the UK and there is no gender-gap in participation, there are shortfalls in some industries, which may point to issues of affordability for employees in those sectors.

“And while auto-enrolment has been a huge success for the employed population, the five million self-employed people in the UK are not captured by the policy. This is a big concern and must be addressed if we are to foster a truly inclusive savings culture.

“The Conservatives made a manifesto commitment to extend auto-enrolment to the self-employed. While the self-employed are likely to need an alternative policy solution, their intention is the right one and we must hope that the policy pledge does not become a victim of the current political turmoil.

“Alongside the challenge of promoting participation in pension savings, there is also the hurdle of increased minimum contribution rates next year and the year after. Known as ‘phasing’ this will see government, employers and individuals pay more into pensions, taking the overall minimum contribution up to 5% from April 2018 and 8% from April 2019.

“It is difficult to anticipate the likely effect of such increases, that said it will put pressure on some employers by adding to their payroll costs, and may discourage individuals from paying in. That is where a case for moving from a position of inertia, which works for getting people into pension saving, moves to one of engagement with them so that they continue to save as they can see the value of doing so.”

For more information contact

Michael GlenisterOld Mutual Wealth020 7778 963807469 144535michael.glenister@omwealth.com

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £116.5 billion in customer investments (as at 30 June 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and the Multi-asset investment solutions business.

The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:

• The Multi-asset business is now Quilter Investors

• Intrinsic to Quilter Financial Planning

• Private Client Advisers to Quilter Private Client Advisers

• The UK Platform to Quilter Wealth Solutions

• The International business to Quilter International

• The Heritage life assurance business to Quilter Life Assurance

• Quilter Cheviot will retain its name

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.