Workplace pension provider Now: Pensions, is calling for the Department for Work and Pensions to consider a number of key areas in its 2017 review of auto-enrolment.

The review is designed to safeguard the long term success of the policy and it is a statutory requirement for a review to take place in 2017.

It will identify the success of the initiative so far, and look for ways it can be improved in the future.

Now: Pensions has identified five key areas it believes the government needs to consider.

The first is the removal of qualifying earnings, the band of earnings on which auto enrolment minimum contributions are calculated.

For the 2016-2017 tax year, the band is between £5,824 and £43,000 a year, which means the first £5,824 of an employees' earnings do not count towards auto-enrolment, nor does anything over £43,000.

Now: Pensions CEO, Morten Nilsson said that although employers are free to pay more than the legal minimum requirement, 94 per cent do not.

He said: "The government should sweep away the qualifying earnings rules and instead base contributions on all earnings."

The second key area for considering, the company says, is to reconsider the trigger because currently more than 5 million people are excluded from auto-enrolment and some are being unfairly penalised.

"At the moment you can have several part time jobs that together pay more than the £10,000 trigger, but you won't be auto-enrolled by any of your employers – it's time to think again," said Nilsson.

Sorting out the 'net pay anomaly is the third key area for consideration, in order to make the current system fairer.

Nilsson said: "There are two ways that pension schemes can collect the tax relief savers benefit from when contributing to a pension; net pay, and relief at source."

"There is an inequality and the government needs to work with the Treasury and HMTC to address this, as all savers should be treated equally, regardless of the scheme they are in."

The fourth key area is rebalancing contributions to minimise opt outs, after recent research from Now: Pensions showed that 24% of auto enrolled savers said they would definitely or might opt out when minimum contributions hit 8% of qualifying earnings in 2019.

Now: Pensions fifth and final priority for consideration, is setting the roadmap for increasing contributions beyond 8%.

Nilsson said: "Very few experts believe 8% is an adequate contribution, and one of the important lessons we are learning is that when the government sets a minimum level of contribution, that is what nearly everyone ends up paying."

"To safeguard the future of auto-enrolment, the government needs to address these five key areas when it undertakes the review of auto-enrolment in 2017 and we strongly urge them to consider these changes to ensure its long-term success."

First published 22.09.2016

Lindsay.sharman@wilmingtonplc.com