Oral Answers to Questions

Debate between Royston Smith and Damian Green

Monday 20th February 2017 Commons Chamber

[Royston Smith (Southampton, Itchen) (Con)]

6. What assessment his Department has made of recent trends in the number of people saving into a pension scheme as a result of auto-enrolment.

[The Secretary of State for Work and Pensions (Damian Green)]

Almost 7.3 million eligible workers have been enrolled into a workplace pension because of automatic enrolment. This is an unseen revolution; the way people are now saving will lead to more freedom, more choice and more security for the pensioners of tomorrow.

[Damian Green]

I agree with my hon. Friend, particularly on his point about young people. The Institute for Fiscal Studies has done some research showing that participation in auto-enrolment among those aged 22 to 29 increased from 28% in 2012 to 85% in 2016. That is a very impressive improvement.

[Royston Smith]

Auto-enrolment has been hugely successful. However, a number of people are still opting out. A business in my Southampton, Itchen constituency suggested that up to 50% of its staff may be opting out. What steps is the Secretary of State taking to encourage people to continue to save for their retirement in a workplace pension?

[Damian Green]

I am happy to tell my hon. Friend that his example is an exception. When the Turner commission reported and suggested this kind of scheme in 2005, it estimated that about 25% of people would opt out, but the opt-out rate is about 10% at the moment. There is always more to do, as my hon. Friend’s example suggests, which is why we are currently conducting a review to ensure that such schemes are even better in the future in order to work for all kinds of individuals, particularly those in small businesses.