The Gullis automatic enrolment (AE) bill is scheduled to have its second reading in the House of Lords. With backing from the Department of Work and Pensions (DWP) we may be months away from crucial AE reforms finally hitting the statute books.

Backed by the Minister for Pensions, Laura Trott, the bill will grant the Secretary of State the power to make two extensions to automatic enrolment (AE): Expanding to workers between the ages of 18 and 22 and removing the lower earnings limit (LEL) so people can start saving from their first pound of earnings.

This is an important step towards reaching a pension savings system that achieves adequate incomes in retirement for savers, something the PLSA has long been calling for. There are now millions of new pension savers compared to before the introduction of AE in 2012.

As legislation continues to adapt, many more people will be able to better meet the costs of later life – when combined with the state pension.

However, there is more to be done to reach other under-pensioned groups, such as women, gig-economy workers, the self-employed and others.

Also, for savers to reach an adequate income in retirement further reforms are needed so that over the next decade, once the cost-of-living crisis has passed, the minimum AE contributions should rise gradually from 8 per cent to 12 per cent, with the introduction of a 50/50 split between the employer and employee.

In this way, no extra contributions will be required from employees until after 2030.

Our Five Steps to Better Pensions: Time for a New Consensus policy paper calls for national objectives to create adequate, affordable and fair pensions; a higher state pension that protects pensioners from poverty; further AE reform; additional policy interventions for under pensioned groups; and the continued delivery of industry initiatives such as the Retirement Living Standards to achieve better pension outcomes.

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