The UK government’s former pensions guru has warned of a “lost generation” of pension savers as major changes to auto-enrolment pensions were announced.
Steve Webb, who joined Royal London after leaving his post as pensions minister, said changes including lowering the starting age for the scheme from 22 to 18 were to be welcomed, but he said the proposed timescale was “shockingly lethargic”.
“Talking about having reforms in place by the mid 2020s risks leaving a whole generation of workers behind. Those who never got to join a final salary pension and who have only recently come into pensions through automatic enrolment need urgent action to help them build up a decent pension pot,” said the director of policy.
“This pedestrian pace of reform risks creating a ‘lost generation’ of people in their late 40s and 50s who will simply be unable to afford to retire.”
As well as reducing the age threshold, the review also includes plans to remove the lower earnings limit which will see a greater employer contribution towards the pension pots of low earners.
Nathan Long at Hargreaves Lansdown said the changes would increase costs for businesses. “The government are clearly mindful of this, hence opting for such a long period over which to roll out the changes which simply delays the retirement of many young people,” he said.