INTRODUCED in 2012, pensions auto-enrolment is widely seen as a great success.
Not only has it brought nine million people into the long-term savings environment, but the amount they are putting away each month will automatically increase as of April too.
Of course, the system is not without its problems. For one thing, anyone earning under £10,000 in a single job is not eligible for the scheme, something that has disproportionately impacted on women.
For another, some unscrupulous employers have used auto-enrolment as an excuse for making minimum contributions when previously those choosing to join their schemes would have received much more.
And, as ICAS president Brian Souter has pointed out, those on the lowest incomes are unlikely to be able to build up an adequate pot, calling into question the logic of diverting some of their earnings in the first place.
Yet stopping making these payments - giving up employer contributions and tax benefits in the process - would appear to be the worst possible way of addressing the problem.
The Government has indicated that it is willing to help, but, as it is yet to reveal when lower earners’ contributions will be based on their entire pay rather than just the portion above £5,876, is showing no sense of urgency.
It is up to employers to step up to the mark, then, by making payments that recognise the contribution staff make to their businesses rather than simply contributing the bare minimum they can get away with.
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