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- British politician (born 1985)
Working 18-year-olds would automatically begin paying into a pension under plans being presented to Parliament.
The proposal is aimed at boosting the pension pots of workers who do not go to university, giving them an extra four years of contributions, and potentially 50 years of compound interest.
The plan is being put forward by Tory MP Richard Holden when the Commons returns following the Christmas break.
I think it's only fair that everybody, when they start work, should be getting this contribution
The current auto-enrolment rules mean bosses must provide a workplace pension for staff aged 22 and over earning £10,000.
But Mr Holden, MP for North West Durham, is putting forward legislation to change the rules.
Under the workplace pension system, employees and employers both contribute to the retirement pot, with staff automatically enrolled unless they opt out.
Mr Holden told the PA news agency: “The majority of my constituents start work at 18.
“And I think it’s only fair that everybody, when they start work, should be getting this contribution.
“It shouldn’t just be something for graduates, or when everybody else happens to graduate, because the compound interest for decades will mean so much more.”
— DWP (@DWP) March 8, 2020
As well as lowering the age limit for auto-enrolment to 18, Mr Holden also wants to change the £10,000 threshold.
It is “iniquitous” that somebody working two part-time jobs, each paying below the threshold, was denied the workplace pension that somebody working full-time would get, he said.
“It’s clearly going to be a substantial change so it needs to be announced in advance.
“But I think this could make a real, real difference to the retirements of people across constituencies like mine, making that retirement a bit easier.”
The long-term benefit of people being more financially secure in retirement could also help potentially reduce “dependency on some elements of the state”, Mr Holden said.
Mr Holden said it would help “level up” individuals across the country, addressing imbalances between areas where people start work at 18 and other parts of the country with a higher graduate population where full-time work begins after they have completed their education.
He will set out his Pensions (Extension of Automatic Enrolment) Bill in the Commons on January 6, but it stands little chance of making progress without ministerial support.
The Department for Work and Pensions aims to abolish the lower earnings limit and reduce the age for automatic enrolment, but not until the mid-2020s.