An adviser trade body is calling for the Government to increase mandatory auto-enrolment contributions.
Contesting that too much attention is being paid to rates of participation in the governmental savings policy, Pimfa argues that the focus should instead be on the amount saved. Issuing a response to the Pensions and Lifetime Savings Association consultation, they state that auto-enrolment should be increased to 12%.
In addition, the trade body has urged the government to place a guarantee on the tax structure, requesting that it doesn’t change for the medium term at least.
Commenting on the need to consider the real impact of the policy was Simon Harrington. The Pimfa senior policy adviser stressed that it was important to look beyond rates of participation when measuring success, stating:
“Automatic enrolment remains the most successful policy intervention for long-term savings in generations. However, we need to step back and assess what the policy actually does – this is a policy where success is measured by participation rather than the adequacy of saving.
“As we reach the end of the staging profile next month, it is absolutely imperative that we shift the focus from getting to people to save more rather than save at all. It is not enough to hope that people will save more through voluntary means, all the evidence we have about consumer behaviour suggests that if the default doesn’t change, nothing will change.”
