Why wait for auto-enrolment?

TISA is calling for the Government, employers and the pensions industry to work together to bring the benefits of automatic enrolment into workplace pensions to the UK's workforce as soon as is practical.

Applauding the Government's recent success in confirming that automatic enrolment into all forms of existing workplace pension is consistent with EU law, TISA is seeking to encourage the key players to bring forward the advantages to the public of long term savings from the launch of Personal Accounts in 2012 to right now in 2008.

To make this possible, all the Government needs to do is define Workplace Pensions in legislation in a way consistent with the agreement they have achieved with the European Commission. This could be done via a small amendment to the Pensions Bill going through Parliament currently.

Employers operating workplace pension schemes could then choose to automatically enroll all of their employees or perhaps all new employees when they join, leaving these people free to opt out if they want.

Starting to save four years early can make a big difference to employees who chose not to opt out - easily increasing the amount saved towards retirement by as much as 25%, if not more.

TISA Director-General, Tony Vine-Lott said: "Nearly 5 million people are not taking advantage of working for a company that offers a workplace pension. This move could play a pivotal role in getting more people benefiting from saving now, rather than having to wait until 2012."

Malcolm Small, Director of Portfolio & Retirement Planning at TISA said: "The Government's success with the European Commission means that there is now no good reason to delay the benefits of auto enrolment, one of their key pension reforms, until 2012."