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Pension auto-enrolment at 18 supported by young adults

Most young people aged 11 to 27 (86%) support the UK government’s proposal to reduce the age of automatic enrolment from 22 to 18, according to a new study from pensions provider, NOW:Pensions.

The findings come as a bill to reduce the age of auto-enrolment makes its way through the House of Lords. 

Jonathan Cribb, associate director at research institute, the Institute for Fiscal Studies, said the reforms could significantly improve younger people’s retirement prospects. 

Speaking to HR magazine, he said: "Reducing the age for auto-enrolment would mean more employees brought into saving for retirement at a younger age, particularly those who leave education earlier and do not go on to university. 

“With such a long time until retirement, compound interest means even small contributions at young ages can be helpful in securing living standards in retirement." 


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Research from the Department for Work and Pensions found there is a gender pension gap of 50% from the ages of 16-24, with women possessing a lower level of pensions wealth. 

Patrick Luthi, CEO, NOW:Pensions said reducing the age of auto-enrolment could help to address this. 

He said: “The government’s backing of this bill was a watershed moment for the pensions industry, one that we have long called for.” 

NOW:Pensions is campaigning for further pensions enrolment reforms, including a roadmap for implementation, an update to parliament within 12 months of Royal Assent of the bill, and a formal review of the automatic-enrolment system.  

Luthi said: “While this is a moment for celebration, we’re not at the finish line yet and we will continue championing these proposals for the benefits of savers, working with government and industry stakeholders until automatic-enrolment reforms are fully delivered.” 

Cribb said the government also needs to clarify and signpost the pension better to help younger employees make informed decisions. 

He said: "It is pretty hard to get most younger adults to engage with pensions. They have many competing priorities and retirement is far away.  

This makes it important for government to make the system as clear and simple for people to understand as possible." 

The study also found 89% of students think pensions should be made a bigger part of the national curriculum. 

Joe Dabrowski, deputy director of policy at trade association, Pensions and Lifetime Savings Association (PLSA), said better education on pensions will help young people understand the impact of the current saving decisions they make. 

Speaking to HR magazine, he said: “We would encourage young people to start finding out about their pension early, in particular what their employer is offering, and if there are ways to achieve more – through say matching contributions.

"Don’t be afraid to ask questions, use the savings portals and apps employers have, and think about their plans for the long-term."

Dabrowski said people should be careful to make sure to keep track of pensions as they change jobs.

“Younger people often have regular career changes so spending some time to keep on top your pensions and what you have built up in different places is important.

"It can be easy to lose track sometimes, and we know there are around £26bn of ‘lost’ pensions out there waiting to be claimed. Don’t let that be yours in the future.”