The Society of Pension Professionals (SPP) has called on the government’s newly revived Pensions Commission to prioritise a long-term plan for Automatic Enrolment (AE) reform, including higher contribution rates and an extension to self-employed workers.
In its paper, ‘Saving Retirement: who is at risk and why?’, SPP argues that the commission should “set out a clear framework and timetable” for gradually increasing AE contributions, to give both savers and employers certainty and to ensure more workers reach an adequate level of retirement income. It also urges the government to extend AE or a similar scheme to the self-employed.
The report highlights the scale of the UK’s pension challenge, with government figures showing 15 million people are currently undersaving for retirement. While the numbers are stark, SPP warns that defining what counts as “adequate” saving, identifying the most under-pensioned groups, and improving understanding of the trade-off between living standards today and saving for the future are equally critical.
SPP also recommends exploring the introduction of a carer’s credit for the UK’s 2.3 million unpaid carers, who often receive no income. The pensions body also proposes raising the £2,880 limit on which non-taxpayers can claim pension tax relief.
Beyond pensions, the paper calls on the commission to explore how wider lifetime saving could be supported. This could include integrating short- and long-term savings schemes, expanding authorised pension scheme benefits (such as long-term care or medical support for critical illness), and promoting Collective Defined Contribution (CDC) schemes.
Sophia Singleton, SPP president, said: “The SPP hopes that this wide-ranging paper proves useful in stimulating debate, thought and most importantly, action, on what is arguably the biggest pensions challenge faced to date. As the paper makes clear, government, industry and savers can all do more, and we all need to if we are to achieve the shared goal of an adequate retirement income for all.”
