Pensions minister Steve Webb has called for the next government to make automatic escalation of auto-enrolment pension contributions a priority.
Speaking at an event held by think tank Resolution Foundation, Webb (pictured), said he felt there were still shortfalls in the government’s pension plans, and that implementing automatic escalation of pension contributions under auto-enrolment should be a priority.
Currently the minimum contribution for auto-enrolment pension schemes is 2% of an individual's qualifying earnings until September 2017. This will rise to 5% after then until October 2017. It will rise further from October 2018. However there has been widespread criticism over the 8% figure not being enough to deliver a sufficient pension for savers.
Automatic escalation would mean raising the minimum contribution automatically every year beyond 8%.
He said: ‘The 8% contribution issue is the first thing the next parliament must address. For me the obvious way [is to implement] automatic escalation, but that will take a long time to do. It isn’t going to happen before 2018 so whoever comes in [after April] can’t waste time.’
Webb also wanted to see greater co-operation between government departments to combat the ‘silo-isation’ of pensions.
‘If you're going to look at the whole person, the current structure of government doesn't work,' he said. 'I would like to see the ability of governments to view the labour market, long-term care and pensions, holistically,' Webb said. 'There's no reason why the pensions minister shouldn't have a foot in the treasury.'
Webb added that despite the upcoming pensions overhaul in April, there was still an enormous workload for the next pensions minister: 'Whoever the new pensions minister is,' he said. 'They need to throw out all the dirty linen and build consensus and focus'.