Independent commission to review auto-enrolment

The Government will undertake an independent review of auto-enrolment, Secretary of state for work and pensions Iain Duncan Smith has announced.

An independent commission - led by three independent experts EEF head of employment policy David Yeandle (pictured), Legal & General pensions strategy director Adrian Boulding, and Paul Johnson - will spend the next three months looking at how to make auto-enrolment work.

Johnson said: "This is an important review for the government."

Secretary of state for work and pensions Iain Duncan Smith and pensions minister Steve Webb outlined what they described as a "radical agenda" on how they will improve pensions in the UK.

They said they would:

• Restore the link between state pensions and earnings from 2011;

• Call for evidence from the public and interested parties on raising the state retirement age to 66;

• Consult on how quickly they will phase out the default retirement age; and

• Undertake an independent review of how to make auto-enrolment work.

Duncan Smith said the Government planned to reinvigorate retirement by helping millions of Britons to get back into a savings habit that has declined over the last decade.

He said: "Britain used to have a pensions system to be proud of, but due to years of neglect and inaction we are left with fewer people saving into a pension every year and the value of the state pension has been eroded, leaving millions in poverty. We must live up to our responsibility to reinvigorate the pension landscape.

"People are living longer and healthier lives than ever, and the last thing we want is to lose their talent and enthusiasm from the workplace due to an arbitrary age limit.

"We also need to recognise that to meet the challenge of providing an affordable, stable pensions system in a society with ever increasing life expectancy, people will need to work longer.

"And we will reward their longer working life by making sure that when they do retire, their pension is worth getting. We are taking radical action to restore the earnings link with the triple guarantee, ensuring our pensioners get the best possible deal.

"Everyone needs to take responsibility for achieving the income in retirement they aspire to. We will support them in doing so by giving people the chance to save into a workplace pension and the freedom to work beyond retirement age if they want to."

Pensions minister Steve Webb added: "I've worked all my life to get a fairer deal for pensioners. Up to ten million people are not saving enough and we cannot allow this situation to continue.

"Our plans to reinvigorate pension saving will be underpinned by automatic enrolment into workplace pensions from 2012. But we need to make sure we get the details right, which is why we're announcing a thorough and speedy review, to make sure that it pays to save."