Pensions - Articles - Comment on TISA phase 2 Getting Retirement Right campaign

Kate Smith, Head of Pensions at Aegon, comments on phase 2 of TISA’s ‘Getting Retirement Right’ campaign

 “We welcome the proposals set out in phase 2 of TISA’s ‘Getting Retirement Right’ campaign. It’s well-recognised that for most people the current auto-enrolment minimum contribution of 8% of a band of earnings won’t be enough to build up sufficient retirement savings. A 12% contribution, split equally between employers and employees, based on whole of earnings, is more likely to achieve this. It’s important that the government sets out a timetable, first for implementing its previously announced intention to remove the salary offset, but even that won’t be enough for many.

 “Everyone should have the opportunity to save for retirement, but it’s more difficult for lower earners. The downside of increasing auto-enrolment contributions is that lower earners may opt out as they can’t afford the higher contribution, and under the current rules, they will lose the right to an employer contribution. Giving lower earners more flexibility, and retaining the right to an employer contribution, along with the removal of the net pay anomaly will go a long way in helping this group to save for retirement.”

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