TUC urges government to consider pension contribution increases

The Trades Union Congress (TUC), the largest union in England, has come together with a number of charities and pension professionals to call for an urgent decision on the increase of pension contributions for the millions of auto-enrolled workers.

Currently, the combined total payable for contributions by workers and employers is 2% of earnings should they be between £5,824 and £43,000. By 2019, the current legislation means that contributions will increase to 8%. Experts believe that this amount is far too low to build a decent pension for retirement, and there are calls for the government to make a decision earlier.

The pensions minister, Richard Harrington, has received a letter from Now Pensions, the People’s Pension, the Association of Consulting Actuaries, Age UK and the TUC, urging him to come to a decision for the next steps. The letter said:

“The 2017 review of automatic enrolment provides a valuable opportunity to create a vision for pension saving and retirement outcomes, and to begin building a consensual approach towards defining the role of automatic enrolment in future pensions and savings policy.”

The Pensions and Lifetime Savings Association and the Confederation Of British Industry (CBI) believe that the decision should be left until 2019, so that the effect of contribution increases to 5% and 8% on workers and employers can be assessed. Harrington, however, has stated that it will be possible to discuss the matter earlier than this.

Here in the Wirral, many people pay contributions to occupational schemes for their retirement, but may but may benefit from financial planning advice to ensure they are not losing out.

Auto Enrolment is not regulated by the Financial Conduct Authority.