Workers could start paying into auto-enrolment pension schemes from the age of 18 under new proposals.
The age limit would be reduced from 22 to 18 after the Department for Work and Pensions (DWP) backed proposals to expand the current scheme.
The move was brought forward in a Parliamentary private members bill from MP Jonathan Gullis and would allow millions of young workers to begin saving for their retirement earlier.
He has called for two extensions to automatic enrolment, abolishing the lower earnings limit for contributions and reducing the age for automatic enrolment to the age of 18.
Delighted with support
Stoke-on-Trent North MP Mr Gullis said auto-enrolment will benefit young people in all four corners of the country, and was delighted the Government was supporting the bill.
The bill provides for the removal of the Lower Earnings Limit and supports those with low earnings and multiple jobs by ensuring they are saving from the first pound earned.
Under the current rules, employers have to pay pension contributions once an employee has earned over £6,240 and up to £50,270 in a financial year. Anyone who does not want to join a pension scheme can opt out.
Expansion
The proposals come following DWP research, which showed that 12.5 million people were not saving enough for retirement. This is despite employees across the UK saving £114.6 billion into their pensions under the scheme since it was introduced in 2012.
There are no details about when the automatic enrolment changes are likely to be introduced, but the DWP says the intention is that the provisions in the bill will not result in any immediate change. Instead it will give the Secretary of State powers to amend the age limit and lower the qualifying earnings limit for auto-enrolment.
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