For once, it feels like common sense has prevailed. The decision to pause the expansion of auto-enrolment pensions is a welcome relief, especially for businesses and individuals already feeling the strain of financial pressures. Increasing minimum contribution rates, reducing the minimum enrolment age from 22 to 18, and removing earnings thresholds might sound like progressive steps on paper, but in practice, they would have hit the wrong people at the worst possible time.
Let’s face it: businesses are still grappling with higher national insurance contributions and increased minimum wages. Piling on additional financial obligations now would not only be unfair but also counterproductive. Instead, we need to focus on sustainable strategies for growth—ones that invest in people and their potential rather than squeezing businesses and employees further.
A Flawed Vision of Growth
When Rachel Reeves, in her Mansion House speech, championed the City’s growth objectives by promising reforms to the pensions market, the goal seemed clear: unlock billions in investments and stimulate the economy. But was the approach right? Boosting revenues for financial institutions under the guise of “economic growth” is yet another example of trickle-down economics—an idea that time and again has proven to benefit the few at the expense of the many.
What if, instead of siphoning money from workers’ pay before it even reaches their pockets, we focused on boosting earnings instead? Imagine the possibilities of a strategy built on human capital—eliminating age discrimination, promoting lifelong training, and creating meaningful employment and entrepreneurial opportunities for an ageing workforce. This is how we truly grow wealth, improve living standards, and secure brighter futures.
The Real Solution Lies in Empowering People
The so-called “pensions gap” is a symptom of deeper societal challenges, not just a lack of savings. Here’s what a forward-thinking solution could look like:
- End Age Discrimination: Too many people face barriers to employment simply because of their age. Let’s change that and create a level playing field where experience and skills matter more than date of birth.
- Invest in Lifelong Learning: Learning doesn’t stop at 18, 22, or 50. Continuous training and upskilling empower people to adapt, thrive, and remain productive throughout their lives.
- Foster Opportunities for All Ages: Work shouldn’t feel like a burden. By creating roles that align with people’s passions and purpose, we enable them to work productively—and even passively—far beyond traditional retirement age, on their own terms.
- Encourage Entrepreneurship: Ageing populations are a resource, not a burden. Let’s support entrepreneurial ventures that tap into their wealth of experience and creativity.
When people earn longer, build wealth, and contribute more to GDP, everyone wins. Tax revenues rise, reliance on state benefits falls, and society thrives. The benefits of this approach far outweigh the quick fix of padding pension pots to appease fat-cat executives.
A Cause for Celebration
So, while pension companies may lament the delay in expanding auto-enrolment, we should see this as a victory for workers, businesses, and common sense. The pause offers an opportunity to rethink our priorities and focus on strategies that truly uplift society.
It’s time to stop robbing those with empty pockets to fill the coffers of those who already have more than enough. Instead, let’s champion an approach that builds wealth from the ground up—through empowerment, opportunity, and fairness.
This is not just about pensions or politics; it’s about creating a society where everyone can thrive, not just survive. And that’s worth celebrating.
Academy of Life Planning 