The video shows Richard Holden MP campaigning for better pensions for all workers and an economic benefit worth Trillions, in North West Durham and across the UK, with his question to the Prime Minister at PMQs on the 5 January.
Richard: "For the last few months, I've been working with Onward on how the health, well-being and security of especially lower paid and part time workers can be improved in retirement. One of the biggest long-term changes that we came up with is extending pensions auto-enrolment to everyone aged 18+, including part-time workers.
Today, I'm introducing a Bill into the House of Commons to try and push the Government to phase in an extension to auto-enrolment to both younger and also to part-time workers.
To phase in auto-enrolment for everyone aged 18+ and part-time workers over the next five years.
Onward have produced a report into the details here: >>> www.ukonward.com/reports/levelling-up-pensions/
1.) The changes would mean that UK workers pension pots would swell by £2.77 trillion. This would help provide long-term security for millions more pensioners, levelling-up their retirement as well as providing a steady stream of patient, long-term capital for investment across the UK by pension funds into things like social housing.
2.) Currently, just 57.8% of part-time workers are contributing to a pension versus 86.4% of full-time workers. Women are far more likely than men to be in part-time work and to have multiple part-time jobs. This change would help level-up prt time workers pension savings dramatically, especially women’s pensions, helping millions more have healthier, happier and a more secure retirement.
3.) While part-time workers across the United Kingdom would benefit from these changes, constituencies outside London, especially in the North East, as well large parts of the South West, the Midlands, and North West set to benefit the most because more have young people starting work at 18 and more part-time workers.
1.) Someone currently working two part-time jobs, each paying them £190/week, would see their pension pot triple over their lifetime with these changes to almost £300,000.
2.) Based on an average return, everyone aged 18-21 will see their pension pot at retirement increase by c. £25,000 for just a few pounds a week contribution in each of those early years just by the nature of compound interest over 45 years+.
This is a serious, long-term change to policy that the Government in 2017 said it was it's "ambition" to look at doing and in the past the Opposition Parties have said they'd like to look at potentially extending auto-enrolment too. However, these changes require legislation to change and time to implement and too often, good, long-term changes like this tend to get put on the back burner to deal with short term issues.
That's why I'm bringing forward my proposals today with the support of a dozen new Conservative MPs.
Further Info and Q&A:
1.) I've written an article for The Times with the Director of Onward, Will Tanner here (or via the picture below): http://www.thetimes.co.uk/.../pension-auto-enrolment-for...
2.) The proposal has been covered in a number of major newspapers:
Financial Times: http://www.ftadviser.com/.../mp-seeks-to-extend-auto.../
QUESTIONS AND ANSWERS:
WHAT IS AUTO-ENROLEMENT?
At the moment, everyone who is aged 22+ and earns over £10,000 a year is automatically enrolled in a pension scheme in addition to their state pension to ensure they have a more comfortable retirement. This was introduced by the Conservative-led Coalition Government in 2012.
Many public sector schemes are good (eg. teachers, army, police, civil servants etc) and some private companies offer good schemes but the auto-enrolment ensures that all employers have to offer a minimum scheme.
WHAT DO I PAY IN AND WHAT DOES MY EMPLOYER PAY IN?
If you hit the criteria (22+ and earning over £10,000 a year) it works like this:
The minimum auto-enrolment scheme means that for every hundred pound a year you earn between £6,240 to £50,270, you pay in £4, your employer pays in £3 and you get tax relief of £1.
So it only costs you 50p for every pound you save into your pension.
Obviously, people can opt-out if they don't want to take part of the scheme.
HAS IT HELPED PEOPLE SAVE FOR RETIREMENT SO FAR?
From 1997 to 2010 the number of people saving into private pensions in addition to their state pension had reduced from about 55% to just over 45% because of increased taxes on pensions.
In 2012 under the Conservative-led coalition, the amount of people saving towards a pension due to auto-enrolment increased from fewer than half of people to over three in four (46.5% to 77.6%).
HOWEVER, this means that many part-time workers who earn below the threshold are excluded and also means that the half of young people who start work or an apprenticeship at 18 do not get the benefit of auto-enrolment for the first four years of employment. That's why I am proposing this change."