Pensions (Extension of Automatic Enrolment) (No. 2) Bill

Jonathan Gullis Excerpts

3rd reading
Friday 24th March 2023 Commons Chamber

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

The Bill before us today provides the legislative powers to implement the 2017 automatic enrolment review recommendations to extend automatic enrolment to young adults aged 18 to 21, by introducing powers to lower the age criteria for enrolment and remove the lower earnings limit, which would improve saving levels among low and moderate earners. Taken together, these changes would help improve financial resilience for retirement among young people, women and lower earners. Extending the eligibility age to 18 will support younger workers and provide them with the opportunity to begin saving from the start of their working lives for a more secure retirement.

Removing the lower earnings limit will proportionately benefit the lowest earners the most. Research from Onward shows that roughly 25% of people from Stoke-on-Trent North, Kidsgrove and Talke are not yet auto-enrolled into pension schemes. The Bill tackles that, creating more stability in the long term. For the first time, everyone will get an employer contribution from the very first pound of their earnings if they are enrolled or opt in. That will help to improve the incentive to save, especially for women and those individuals working part time or in multiple jobs.

Automatic enrolment has been and remains a long-term project. It has been successful through the adoption of a carefully staged, systematic and evidence-based approach, which has been supported by the consensus, including cross-party support, in this place. That is the approach on which successful expansion must be based and why the Bill works in the way that it does—to require Ministers to consult before implementing these changes, for example, on the best way and the optimum timetable for doing so. That gives Parliament, employers, workers and other stakeholders a key role in determining how best to implement the expansion of workplace pensions.

People who earn £9,000 from two separate jobs, and who may be working 12 to 18 hours a week, juggling their jobs around childcare or caring responsibilities, do not currently get the benefits of auto-enrolment at all. For part-time workers, auto-enrolment stands at around 60%, compared with almost 90% of workers in full-time jobs. The Bill will see roughly an extra third of the part-time workforce auto-enrolled, which is an increase on the percentage based in Onward’s research.

Further research from Onward suggests that, when this change comes through, it will bring almost £3.5 billion to people in our area for their total life savings. This will be transformative for the lives of everyone not just across our great country but, most importantly, across Stoke-on-Trent North, Kidsgrove and Talke.

The Bill will help to put cash into communities, help people to help themselves, and provide the extra private sector money to deliver the levelling up that we so desperately need. Automatic enrolment is widely and rightly recognised as a success. It has transformed workplace pension saving for millions of workers and is enabling them to save towards greater security in retirement.

What this Bill makes certain is that, in areas such as Stoke-on-Trent North, Kidsgrove and Talke, North West Durham and Consett, where nearly one in four people are not yet auto-enrolled onto a pension scheme, people will have more financial security in the long term. It simplifies the process, and for just a few pounds a week, through the power of compound interest, people could be £30,000 better off in retirement. That is absolutely transformative, which is why the Bill is so critical.

I know that the whole House is proud to support the Bill at this current stage and is committed to this expansion of auto-enrolment to build a more inclusive and stronger savings culture for future generations.

--- Later in debate ---

[Jonathan Gullis]

With the leave of the House, I wish quickly to place a few thank-yous on the record. First, let me thank the fantastic civil servants in the Department for Work and Pensions, many of whom are sitting in the Box today. They have been tremendously helpful to both me and my team in getting the Bill to where we are today. I thank the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Sevenoaks (Laura Trott), for her fantastic work in unblocking the blockages that had previously existed to bringing this legislation forward.

I thank the Opposition Front Benchers, including the hon. Members for Reading East (Matt Rodda) and for Wirral South (Alison McGovern), for all their support, kind words and guidance. I thank the Scottish national party spokesman, the hon. Member for Glasgow East (David Linden), who has championed this measure and is very excited by it. I also wish to thank the Association of British Insurers, the Pensions and Lifetime Savings Association and the TUC for all their fine work, as well as Onward, that fantastic think tank, for the incredible work it is doing, now led by Sebastian Payne.

I also thank my hon. Friend the Member for Castle Point (Rebecca Harris), who does not get enough praise in this House. Without her guidance and stern tongue, I might not sometimes be able to be kept in line enough to make sure that we move things smoothly along. So I am grateful to her for the advice she has provided to get us to this place. I also place on record my thanks to Baroness Altmann, who is going to be taking this Bill on in the other place and guiding it safely through to Royal Assent.

The final big shout-out needs to go to my office buddy, my hon. Friend the Member for North West Durham (Mr Holden), who did all the donkey work, the leg work, for this Bill. I have shamelessly come in and picked it up after he was sent to such high office that I see him only once a week, rather than three or four times a week. I also thank his incredible staff members, Gabriel Millard-Clothier and Robbie Lammas, as well as my own parliamentary researcher, Harry Mahoney-Roberts, and Nathan Purchase in my constituency office, who have suffered with me to get to where we are today. This is a fantastic piece of legislation and it will make a change to many lives in the future.

Question put and agreed to.

Bill accordingly read the Third time and passed.