Understandably dwarfed by news of weather chaos across the UK, it is nevertheless the case that an announcement is expected today which will signal that some 3 million UK employees have now been involved in the great pensions legislative gamble that is Auto-Enrolment.
But whereas the weather is (hopefully) just a short story, Auto-Enrolment, and the wider pensions crisis, is a long running saga. And this particular tale is still a very long way from the final chapter.
The 3 million mark is significant. It shows that the legislation is starting to bite, and that the UK is well on the way to a collective move towards retirement savings. This is good news.
Yet the doom-merchants are right to flag that the levels of savings are far too low, and in many cases unlikely to produce a significant pension outcome for the savers.
So what should we take from this?
In reality, Auto-Enrolment was never going to be the complete answer to the problem. But it is a first, and hugely important, step towards tackling the savings gap. We should welcome the initiative, however legislative burdensome it has become, as it is likely to result in the vast majority of the UK working population taking the first important step towards a secure retirement income.
And once this chapter in the story is complete, we can then all move on to the next page. The story is likely to turn to one of saver engagement, and education regarding the retirement savings process.
It won’t make for light bedtime reading, but it might just lead to a happy ending for most.
Best regards
Steve
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