“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.”