Working 18-year-olds forced to pay into pensions under Tory MP's plan

18-year-olds who are employed would automatically contribute to a pension under the plans presented to Parliament.

The proposal aims to top up the pension pots of non-university workers by giving them four additional years of contribution and possibly 50 years of compound interest.

The plan will be presented by Tory MP Richard Holden when the Commons return after the Christmas break.

The current auto-enrollment rules mean that managers are required to provide a company pension to employees aged 22 and over earning £ 10,000.

But Mr. Holden, MP from North West Durham, is proposing laws to change the rules.

As part of the company pension system, both employees and employers contribute to the pension fund, with employees being automatically enrolled unless they quit.

Mr. Holden told the PA News Agency, “The majority of my voters start working at 18. And I think it is only fair that when everyone starts their work they should receive this contribution.

“It shouldn’t be just for graduates or when everyone else is graduating, because decades of compound interest will mean so much more.”

In addition to lowering the age limit for auto-enrollment to 18, Mr Holden also wants to change the £ 10,000 threshold.

It was “unfair” that someone who had two part-time jobs that were paid below the threshold should be denied the company pension that a full-time worker would receive, he said.

“It will clearly be a major change so it needs to be announced in advance.

“But I think this could make a real difference in retiring people in constituencies like mine, and make that retirement a little easier.”

The long-term benefit of having retired people financially secure could also help potentially reduce “reliance on some elements of the state,” said Holden.

Mr Holden said it would help “level” individuals across the country by removing imbalances between areas where people start working at 18 and other parts of the country with a higher graduate population where full-time employment after completing their education begins to be fixed.

He is due to table his Pension Insurance Act (Enhancement of Automatic Enrollment) in the House of Commons on Jan. 6, but it stands little chance of moving forward without ministerial support.

The Office for Labor and Pensions wants to abolish the lower wage limit and lower the age for automatic enrollment, but not until the mid-2020s.


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