An MP has proposed plans to lower the age for auto-enrolment from 22 to 18 and to extend the scheme to lower and part-time earners.
Conservative MP Richard Holden has tabled a motion to extend automatic enrolment for debate in the House of Commons today.
His Pensions (Extension of Automatic Enrolment) Bill would see working 18 to 22-year-olds, and those who work part-time or receive low pay, automatically enrolled into a pension scheme.
Under the current auto-enrolment rules automatic saving does not kick in until the worker is earning over £10,000 a year and is over the age of 22.
A report from think tank Onward today suggested that abolishing the £10,000 earnings trigger and the £6,240 lower earnings limit, as well as reducing the age threshold, could see a full-time worker on the national living wage gain a 60% increase in their workplace pension savings.
It said that by making these changes through a phased approach, a worker with two part-time jobs could see their pension savings triple once the new rules were in force.
The think tank said that younger workers could save an extra £20,267 for retirement.
The report by Onward said the two measures could add £2.77trn to the UK’s retirement savings.
Mr Holden MP said: “Auto-enrolment has been one of the massive hidden triumphs of the last decade in the UK, but sadly millions of hard-working British people aren't benefitting because they're under 22 or simply not working enough hours. I want to change that.
“In 2017 the Government said that it would look at extending auto-enrolment by the mid-2020s but to hit those dates we need legislation now to make it happen and allow business time to phase in these important changes. That's what my Bill will do.
“Nothing could show clearer intent towards long-term levelling up than ensuring that everyone who works hard will see a safer and more secure retirement and I hope that the Government backs my campaign for action now.”
The Department for Work and Pensions has previously said it plans to extend auto-enrolment, but not until the mid-2020s.