Plans unveiled last week by the Government to help bring in auto-enrolment for pensions by 2020 are welcome but 700,000 people may be excluded from the new scheme, according to a leading pensions advisor.
Mercer said that groups of workers, including the self-employed, people outside the designated age band, and people earning less than €20,000 a year could be excluded from auto-enrolment.
“While we would have preferred fewer restrictions on age and income, the system will capture a large segment of the population, covering those aged between 23 and 60 years of age and earning €20,000 or above per annum across all employments," it said.
However, we estimate that nearly 700,000 further workers with the ability to opt-in will not be automatically enrolled.
Mercer also said that “the biggest challenge” is that the Government top-up may be less than the tax relief for the best paid.