Maintaining the momentum on auto-enrolment

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The Government's policy of auto-enrolment has brought nearly 6 million new members into pension schemes. This has been a revolution in that it has brought about a striking reversal in the previous long-term decline in long-term savings. Albeit a slow revolution though: when auto-enrolment finally 'stages' to all employees in 2018, it will have taken 13 years since the Turner Commission first recommended the strategy in 2005.

Whilst there are key challenges to overcome in the next couple of years, the government and industry should exploit and build upon a clear momentum behind the policy that clearly exists. Two key issues still need to be addressed.

The first is delivering the levels of income in retirement that people on average appear to want, through initiatives such as auto-escalation. The second issue is protecting savers' finances whilst they are building their assets for retirement. For example, while addressing the savings gap, it does not address the immediate needs of younger savers such as income protection or life assurance.

In this CII Thinkpiece, Nick Hurman, FCII Chartered Insurer explores the issues.