"It’s bitterly disappointing that this really important piece of legislation will now be delayed until September, which could push this back considerably, as there’s still a few stages to get through."
A new bill which would extend the scope of auto enrolment has been delayed until later this year.
The expansion of automatic enrolment was proposed back in 2017 by a Government review but no action had been taken since then to implement the proposals.
But in March, the Government gave its backing to a Private Member’s Bill which would make the necessary changes.
The Bill was expected to receive Royal Assent this month before the parliamentary recess which begins today. However, the Committee stage in the House of Lords has now been pushed back to the 12th September.
The changes would require automatic enrolment of employees as soon as they reach 18 rather than the current age of 22, and apply the mandatory 8% contribution to earnings ‘from the first pound’ rather than only to those above a lower earnings limit.
Kate Smith, head of pensions at Aegon, commented: “Having rapidly passed through parliament in a matter of months, with cross-party consensus intact, we had high hopes that the Pensions (Extension of Automatic Enrolment) (no. 2) Bill would receive Royal Assent this month before parliamentary recess on 20 July. However, the government has clearly run out of time, with the Committee stage in the House of Lords pushed back to 12 September, a week after parliament restarts.
"It’s bitterly disappointing that this really important piece of legislation will now be delayed until September, which could push this back considerably, as there’s still a few stages to get through. If the Bill fails to get Royal Assent before the King’s Speech, which is due to take place sometime in the autumn, there’s a real risk that the process will have to start all over again, or even worse, be kicked into the long grass.
“This legislation will not only bring younger people into the scope of auto-enrolment, allowing them to start saving in a workplace pension from age 18 instead of 22, but could be particularly helpful for low to mid-earners, enabling them to build up a larger pension pot under further changes that will see employer and employee contributions based on earnings from the first £ rather than applying a £6,240 salary offset.“
