Automatic enrolment was introduced by the government for a number of reasons, including:
- To encourage people to save – currently it is thought that only half of the UK population is saving enough for retirement. Automatic enrolment will make it easier for people to start saving.
- To allow for a longer retirement – people now have more time in retirement than ever before and so need more savings to enjoy a comfortable retirement.
- To provide additional income on top of the State Pension – the State Pension provides a maximum income of £119.30 a week (single person’s allowance for the tax year 2016/17). It is likely that you will need more than this, so the government wants to encourage people to save in other ways.