The Pensions Minister, Laura Trott, has confirmed plans to launch a consultation on plans to extend auto-enrolment (AE) to lower earners and younger workers in autumn, subject to the Private Member’s Bill allowing the changes achieving Royal Assent.

The Private Member’s Bill, which recently moved to the House of Lords, seeks two extensions to AE, abolishing the lower earnings limit for contributions and reducing the age for being automatically enrolled to 18.

Speaking at an industry event, Trott clarified that whilst she was unable to provide a timeline for the proposed changes included in the bill, she remains committed to doing the consultation in autumn, which she suggested “by anyone’s standards, is a pretty quick turn around”.

"The 2017 AE review was clear that the next steps in bolstering savings would be to reduce the lower earnings limit to ensure contributions are paid from the first pound of earnings and lowering the age of eligibility from 22 to 18," she stated.

"Our analysis shows that these changes will benefit over 3,000,000 workers, with half a million 18- to 21-year-olds walked into saving for the very first time.

"It's my intention to consult, subject to Royal Assent of the bill, on implementation of these changes in the autumn, working together with all of you on how and when we make these vital changes."

Commenting on the autumn date for the AE consultation, PensionBee director of public affairs, Becky O’Connor, said: “The consultation plans could potentially bring millions more people into pension saving over the coming years, giving them a better chance of a decent standard of living in retirement.

“The early years of work can be a prime opportunity to save into a pension and offer the chance of getting a valuable head start. Meanwhile, people on low earnings, who are often women, also need a shot at building a pension.

"Often, low earners have a few lower paid jobs or are the second earner in a family, and so may be able to afford pension contributions, despite a low salary. Reducing the lower earnings limit would give them more chances of a decent retirement.”

However, Trott argued that despite the success of AE, there is still more to be done, highlighting ongoing work to expand collective defined contribution (CDC) framework in particular.

"I'm pushing forward on the expansion of CDCs," she stated. "CDC funds share risk across members and remove the need for lifestyling, and overtime it will allow the scheme to actively target higher investment returns.

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