Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, whether her Department has made a recent assessment of the potential effect on public finances of extending auto-enrolment of pensions to 18 to 21 year olds.

Yes. The Government is committed to lowering the age range. We will be implementing the 2017 Automatic Enrolment Review ambitions in the mid-2020s.

Our ambition to lower the age limit for automatic enrolment to 18 will normalise workplace pension saving for more young people as they start work for the first time. The 2017 Review estimated that this change would bring an estimated further 910,000 young people into automatic enrolment putting an estimated extra £0.8 billion into pension saving (of which £113m is in tax relief). As the 2017 review makes clear, there is a great deal of uncertainty as to how employers might go about managing the costs of additional contributions and thus the total cost of the package to government. We will update our assessment on the impact of implementing the review measures when appropriate using the best available evidence.

The 2017 Review report was clear that implementation will be subject to learning from previous workplace pension contribution increases, discussions with employers and others on the right approach, and finding ways to make these changes affordable.

We will do this in light of the impact of the pandemic and our overall support for economic recovery, while continuing to support long-term saving, balancing the needs of savers, employers; and tax-payers.