Auto-enrolment isn’t the whole answer to pensions misery.

I know from the emails and letters I receive that pensions are still a source of confusion for lots of our readers. The auto-enrolment that was introduced by the government a few years ago is taking shape, and will help many millions of workers to retire with more than they ever thought they would have in their pension funds.

But it should only have been seen as a start, not an end product, and much still needs to be done. In the first place it still gives the option to opt-out and while many think that option needs to be there to protect people’s rights and flexibilities it’s certainly the case that some of the people who choose to opt out are those who can ill-afford to do so from a retirement planning point of view.

The second problem is that many low paid workers will not be automatically enrolled into a workplace scheme and may not choose to join at all since it means seeking out the scheme and taking positive action. So there is without question an opportunity for the Government to reduce the income level for automatic enrolment.

Many of these low paid workers are women and there is a terrible imbalance in the pension funds being built up by men and women at the moment, with some sources suggesting that the average pension fund for women is only around one-third of that of the average male.

The self-employed are excluded from auto-enrolment and so are missing out on really important pension provision. There needs to be something done to make sure that this really important group of workers is not discriminated against because of lack of pension provision. There must be some way that the self-employed are given to chance to opt-in to some sort of ‘group’ auto-enrolment scheme, perhaps at the same time as they are completing their tax return. Raising the subject when tax returns are being completed will also allow the self-employed to see how pension payments can reduce tax bills as well.

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