A Bill, which proposed reducing the age for being automatically enrolled into a pension from 22 to 18, was recently given Royal Assent. This means the government now has the power to make it law if they choose to. 

Other changes proposed in the Bill could also mean that contributions could be paid on a higher proportion of earnings, if the government decides to implement the changes.

The Department for Work and Pensions (DWP) will launch a consultation on how and when these powers could be used, however there is no change as of yet. 

Potential changes

The 'Pensions (Extension of Automatic Enrolment) Act 2023' was given Royal Assent on 18 September 2023. 

'Royal Assent' is when a monarch formally approves of legislation. Today, Royal Assent is regarded as a formality and part of the final step required for a parliamentary bill to become law. Granting Royal Assent turns a Bill into an Act of Parliament. 

The new Act means the government has the power to introduce regulations to:

• reduce the minimum age to be automatically enrolled into a workplace pension, from 22 to 18
  
• lower the minimum earnings threshold on which contributions are calculated, so that contributions are calculated on a larger proportion of earnings, from £6,240 a year to £1 a year

Auto-enrolment as it is now 

Currently, those who don't have a workplace pension can be automatically enrolled into a workplace pension when they're 22 and above, providing they meet the criteria.

Since it was introduced in 2012, auto-enrolment has helped millions put more into their pension pots than ever before, according to figures released in 2022 to mark 10 years since the policy was introduced.

However, if the government decides to put these regulations into place, people can be automatically enrolled into workplace pensions at 18. It could also lower the minimum earnings threshold at which an employer must start paying in.

Currently, auto-enrolment applies to those aged between 22 and 66.

You do have the option to opt out of a pension, however you'll be automatically enrolled back in in three years' time.

What's next

The regulations are not yet in place, so nothing has currently changed and it's not yet known when or if it will in the future.

If you're a member that has recently joined the Fund, here's a reminder of some new resources available to you.

Also, keep an eye out for your latest Focus newsletter which will be available to you towards the end of this year.