This is a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government. The previous URL of this page was https://www.gov.uk/government/policies/helping-people-save-more-for-their-retirement-through-workplace-pensions Current policies can be found at the GOV.UK policies list.
Millions of people are not saving enough for the income they are likely to want in retirement. Life expectancy in the UK is increasing but people are saving less into pensions.
To help people save for their retirement the government wants workplace pensions to be affordable for employers and attractive to workers. We want to encourage people to increase the amount they are saving in pension schemes so that they get the retirement income they would like. Enrolling workers into improved workplace pension schemes automatically will help to do this.
The government has other pension reform policies including:
- introducing the proposed simple, single-tier (flat-rate) State Pension to help people understand what they need to save for their retirement
- reviewing the State Pension age to make sure the State Pension is affordable in the long term and fair between generations
To help people’s pension savings meet their retirement income expectations we are:
- making enrolment into workplace pensions automatic
- providing information about workplace pensions for individuals, employers and the pension industry
We published our ‘Reinvigorating workplace pensions’ strategy on 22 November 2012. It explains how we plan to:
- increase the amount people are saving in pensions and the amount they receive for their savings
- enable industry innovation and development of new products
- increase transparency and build trust, confidence and engagement in pension saving as the norm
- make sure the UK pension system is sustainable and stable
In the coalition agreement, we announced our intention to encourage companies to offer high-quality pensions to all workers and to work with business and the pension industry to support automatic enrolment.
We commissioned an independent review of how to make automatic enrolment work that was published in October 2010 – ‘Making automatic enrolment work – a review for the Department for Work and Pensions’.
The Pensions Act 2008 introduced measures aimed at encouraging greater private saving. It included the changes to workplace pensions that came into effect in 2012.
Welfare reform communications toolkit
Our welfare reform communications toolkit helps explain how DWP is changing the welfare system. It covers:
- what we are changing
- why we are making the changes
- when we are making the changes
Who we’ve consulted
We’ve consulted employers, savers and the pension industry on the following subjects:
- Occupational pension schemes: abolition of defined benefit contracting-out (from 8 May 2014 to 2 July 2014) – changes resulting from the abolition of defined benefit contracting-out in occupational pension schemes
- Reshaping workplace pensions for future generations (from 7 November 2013 to 19 December 2013) – our proposals for a new regulatory framework for future pension provision.
- Definition of money purchase benefits in occupational pension schemes (from 31 October 2013 to 12 December 2013) – the draft Pensions Act 2011 (Transitional and Consequential Provisions) Regulations 2014
- Better workplace pensions: a consultation on charging (from 30 October 2013 to 28 November 2013) – a range of measures to tackle pension charges to protect employees in workplace defined contribution pension schemes
- Pensions and growth (from 25 January 2013 to 7 March 2013) – a new statutory objective for the Pensions Regulator and the way scheme funding valuations work
- Abolition of contracting out – consultation on a statutory override for Protected Persons Regulations (from 18 January 2013 to 14 March 2013) – whether employers should be permitted to change the pension scheme rules which apply to certain people (‘protected persons’)
- The Pension Protection Fund and Occupational Pension Schemes (Miscellaneous Amendments) Regulations 2013 (from 19 December 2012 to 29 January 2013) – certain changes to the Pension Protection Fund
- Supporting automatic enrolment – call for evidence on NEST constraints (6 November 2012 to 28 January 2013) – the annual contribution limit and the transfer restrictions placed on the National Employment Savings Trust (NEST)
- National Employment Savings Trust (NEST): Proposals for amendments to the NEST Order (from 30 October 2012 to 26 November 2012) – changes to make sure that NEST operates efficiently and to take account of recent changes to automatic enrolment legislation
Bills and legislation
We introduced the Pension Schemes Bill 2014 to 2015 to Parliament on 26 June 2014. It sets out a new legislative framework for private pensions. This aims to make greater risk sharing between employers, individual members and third parties easier. The Bill is intended to encourage and enable ‘shared risk’ pension schemes and schemes that provide ‘collective benefits’.
The Pensions Act 2014 puts into law a number of measures that affect workplace pensions. For example, it corrects an anomaly in Sections 3 and 5 of the Pensions Act 2008 which can produce a simultaneous duty to automatically enrol and re-enrol jobholders. The Act deals mainly with proposals for a single-tier state pension.
The Pensions Act 2008 put into law changes to the private pension system set out in the white paper, ‘Personal Accounts: a new way to save’, which was published in December 2006. It included the changes to workplace pensions that came into effect in 2012.
We have published an impact assessment on provisions in the Pensions Schemes Bill 2014 to 2015.
Impact assessments for the provisions in the Pensions Act 2014 affecting workplace pensions are available on the Pensions Act page.
Appendix 1: making enrolment into workplace pensions automatic
This was a supporting detail page of the main policy document.
We are making enrolment into workplace pensions automatic. Starting from October 2012, millions of workers will be enrolled into a workplace pension by their employer. This will make it easier for people to start saving for their retirement.
People aged 22 or over who are earning more than £9,440 a year will be automatically put into a pension scheme by their employer. Individuals who choose to save will also benefit from an employer contribution. The government will contribute in the form of tax relief. Larger employers are enrolling their workers first.
The Pensions Regulator
The Pensions Regulator will make sure that:
- employers and others meet their new duties
- workers get their new rights
National Employment Savings Trust
To support automatic enrolment we’ve introduced a new workplace pension scheme called NEST (National Employment Savings Trust). NEST is a qualifying scheme for automatic enrolment purposes and is available for any employer who wants to use it to meet their duties.
Appendix 2: providing information about workplace pensions for individuals, employers and the pension industry
This was a supporting detail page of the main policy document.
Information to help individuals, advisers, employers and the pension industry understand and explain workplace pensions includes:
- a pensions language guide
- detailed guidance for employers, advisers and actuaries
- a publicity campaign
- links to other sources of information about workplace pensions
Pensions language guide
We’ve published the Automatic enrolment and pensions language guide because research (published with the guide) showed that complex language puts people off. A dense paragraph or authoritarian-sounding words can lose the attention of the reader quickly and put pensions in the ‘too difficult’ category.
The workplace pensions campaign is letting people know that employers across the UK now have to offer their workers a workplace pension. Visit www.gov.uk/workplacepensions for the latest information about automatic enrolment into a workplace pension for workers and employers. There are also real-life automatic enrolment case studies on YouTube. They show the benefits of making provision for the future and how saving into a workplace pension can help.
The Pensions Regulator
The Pensions Regulator publishes the latest information about automatic enrolment for workers, employers and others.
The department works closely with partner organisations that provide pension—related information, including:
- the Pensions Advisory Service (TPAS) that helps to answer complex pension questions
- the Money Advice Service (MAS) that helps people manage savings or debt
Detailed guidance for employers, advisers and actuaries
We’ve published a series of detailed guides for employers, advisers and actuaries on automatic enrolment. This guidance supplements the information provided by The Pensions Regulator and includes guidance on:
- offering a default option for defined contribution automatic enrolment pension schemes
- default options for defined contribution automatic enrolment pension schemes
- certifying defined benefits and hybrid pension schemes
- Hybrid Schemes Quality Requirements Rules 2012 (to be read in conjunction with the guidance above)
- certifying money purchase pension schemes
Other sources of information about workplace pensions
The Pensions Regulator is responsible for ensuring employers comply with the new law to automatically enrol all eligible workers into a workplace pension. The Pensions Regulator has produced detailed guidance for employers to help them do this.
National Employment Savings Trust (NEST) is a pension provider available to all employers who want to use it. NEST has been designed to complement existing provision.
www.gov.uk/workplacepensions can help individuals and employers to find out more about how the automatic enrolment into a workplace pension might affect them.
The Pension Tracing Service can help individuals keep track of their workplace pensions. Lots of people move jobs several times in their working lives, so it’s important to keep track of their pensions. If an individual has lost track of a pension, the Pension Tracing Service could help provide them with contact details for that pension.