Altmann: Create a culture where it pays to save

Earlier this month we hit a major milestone with auto-enrolment: 6m workers have now been signed up for a workplace pension.

This is fantastic news and the start of a workplace pensions revolution that by 2018 will see around 9m more people either saving for the first time or saving more.

And just as impressive is the fact that more than 100,000 employers have now enrolled their staff – but there are over 1.5m yet to start. 

Once workplace pensions saving becomes the norm, of course we also want to encourage people to save more than the minimum

As we moved to the next phase of auto-enrolment we always knew small and micro employers would face different challenges in enrolling their staff.

Further to go

So far, with the right support, employers have found themselves more than equal to the task, but there is still much further to go. 

Auto-enrolment sets a minimum level for pension savings, which is a really important start. Currently the contributions are only 2 per cent of band earnings; over the next three years that will quadruple. 

Once workplace pensions saving becomes the norm, of course we also want to encourage people to save more than the minimum.

Advice allowance

I am delighted that, in his Budget, the chancellor announced more measures to encourage saving at all ages and improvements for guidance and advice.

Allowing employers £500 tax and national insurance relief, instead of the £150 if they arrange advice, and consulting on the pensions advice allowance are important steps towards helping more people plan properly for later life. 

All of these changes reinforce our commitment to supporting savers and creating a culture where it pays to save.

Auto-enrolment is part of our policy which aims to improve millions of people’s later-life living standards by encouraging good private pensions.

Ros Altmann is the pensions minister