The Department for Work Pensions has confirmed it will legislate to give millions of younger workers a better retirement through auto-enrolment pension savings.

A new generation of workers can now benefit from the pension opportunities of their predecessors, said the government department.

The review that looks at past and present work pensions includes:

• Automatic enrolment duties continuing to apply to all employers, regardless of sector and size
• Young people, from 18 years old, benefiting from automatic enrolment, introducing 900,000 young people into saving an additional £800 million through a workplace pension
• Workplace pension contributions calculated from the first pound earned, rather than from a lower earnings limit – this will bring an extra £2.6 billion into pension saving, improving incentives for people in multiple jobs to opt-in, and simplifying the way employers assess their workforces and calculate contributions
• The earnings trigger remaining at £10,000 for 2018/19, subject to annual reviews
• Contribution levels reviewed after the implementation of the 8% contribution rate in 2019
• The government testing a series of ‘targeted interventions’ – including through opportunities to work with organisations who act as ‘touch points’ for the 4.8 million self-employed people, such as banks and those who contract labour – to explore how technology can be used to increase their pension saving

Ruston Smith, trustee director at Peoples’ Pension said: “Automatic enrolment has been a game changer – helping bring millions more people into pension saving.

“As we look to the future there’s clearly a challenge for both the pensions industry and for government to help and encourage people to engage with their retirement savings and to plan ahead. Creating a much simpler language and conversation around retirement savings is just one important step we need to take.”

Jamie Jenkins, head of pensions strategy at Standard Life, said: “The measures will ensure that as many people as possible have the opportunity to start to build up pension savings. Since this policy was introduced it has enjoyed huge success and it is right this is extended to include young workers, and those who might not have a standard employment set-up.

Chris Curry, director at Pensions Policy Institute added:  “We all want to be able to enjoy a comfortable retirement and to maintain our standard of living. However the review has shown that one of our greatest challenges remains that many people are still actually under-saving. 

“By removing the lower earnings limit we’ll be enabling people to contribute towards their pension savings from the first pound of savings.”

Some experts have expressed their dissatisfaction however.

Responding to the DWP report “Automatic Enrolment Review 2017: Maintaining the Momentum” Jamie Clark, business development manager at Royal London Intermediary pensions, said: "It's disappointing that the issue of non-taxpayers not receiving tax relief through no fault of their own seems to have been kicked into the long grass. Confirmation that the auto-enrolment threshold is to remain static while the tax Personal Allowance continues to increase means even more people will be affected. 

“We urge Government to seek an end to this legislative arbitrage sooner rather than later to help lower paid worker build up bigger pension pots. "

Auto-enrolment was launched in 2012, with more than nine million people now enrolled into a workplace pensions, the majority under 30 years of age.