Day 29 · Proposal 28 · Part XII · Policy 31
28
Compulsory Workplace Pensions
Every job. Every worker. A pension that follows you.
Open for scrutiny — Manifesto 1.1
Proposal 28 would replace the current opt-out workplace-pension structure with compulsory participation for every person in employment. Employees would make a statutory payroll contribution, employers would match it and government would provide tax relief equal to 25% of the employee contribution. Contribution rates would rise gradually, with affordability protections, portability and safeguards for low-paid and non-standard workers.
Published Manifesto 1.1 policy. The sections below set out the proposal as published. Questions and challenges are open questions, not settled answers.
1. The core idea
Manifesto 1.1 proposes that every person in employment should build a workplace pension. The model would replace today’s opt-out structure with compulsory participation, so that every job includes retirement saving from the beginning.
Each employee would make a statutory contribution. The employer would match it, and government would provide tax relief equal to 25% of the employee contribution. The required contribution rate would rise gradually rather than being imposed at its final level immediately.
The aim is to create funded retirement provision throughout working life, reduce long-term dependence on the State Pension and support Policy 32’s proposed minimum retirement-income safety net.
Core commitment
Every person in employment builds a pension — with an employer match and government support.
2. The three-way contribution
- Employee: A statutory contribution deducted through payroll and invested for retirement.
- Employer: A matching contribution, making retirement saving part of the cost and reward of every job.
- Government: Tax relief equal to 25% of the employee contribution, subject to a clear and consistent legal design.
- Portable pension: A pension record that follows the individual across jobs, sectors and changes in working pattern.
3. From automatic enrolment to universal participation
The current UK system requires employers to provide a workplace pension and automatically enrol many workers. However, eligibility thresholds and exemptions apply, and an enrolled worker can normally opt out.
Proposal 28 would go further: every person in employment would participate, with no routine opt-out from the statutory minimum.
- Current model: Automatic enrolment generally applies from age 22 to State Pension age where earnings reach the statutory threshold.
- Current minimum: In most current automatic-enrolment schemes, the legal minimum is 8% in total, including at least 3% from the employer.
- Proposed model: Every person in employment would have a workplace pension and make at least the statutory minimum contribution.
- Proposed match: The employer contribution would match the employee contribution rather than merely satisfy a lower separate minimum.
Context and proposal
The current rules explain the starting point. They are not the final design of the proposed universal, compulsory model.
4. How the proposal would build a pension
- 01Employment begins: The employer registers the worker and pension arrangement from the first eligible pay period.
- 02Employee contribution: A statutory share of pensionable pay is deducted through payroll.
- 03Employer match: The employer contributes an equal amount under the proposed matching rule.
- 04Government relief: Government adds support equal to 25% of the employee contribution.
- 05One continuing record: The worker retains a clear portable pension record when changing jobs.
Illustrative example — not a settled statutory rate
Illustrative only: employee pays £40 + employer pays £40 + government adds £10 = £90 invested.
5. Safeguards for a compulsory system
Compulsion creates responsibilities for government, employers, pension providers and regulators. A statutory minimum must be affordable, transparent and protected from excessive charges, poor administration and unsuitable investment.
- Low and variable pay: Phase contribution rates carefully and test their effect on take-home pay, debt and household hardship.
- Multiple jobs: Combine contributions clearly so people with several small jobs do not lose employer support or create fragmented pots.
- Changing employers: Use a portable default arrangement or effective consolidation so workers can follow and understand their pension.
- Parental and sick leave: Define how statutory pay, career breaks and temporary absences affect contributions and employer matching.
- Investment protection: Apply regulated default funds, charge controls, governance duties and clear routes for complaints and compensation.
- Plain-language records: Show employee, employer and government additions, fees, investment performance and projected retirement income.
- Small employers: Phase implementation, simplify payroll and consider transitional support without weakening the employee entitlement.
- Non-standard work: Resolve coverage for agency work, zero-hours contracts, short contracts, platform work and employment-status disputes.
6. Relationship with Policy 32
Policy 31 is intended to build private pension income. Policy 32 would provide a proposed minimum retirement income of £18,000 a year, with the state contribution reduced as private pension income rises.
The two policies must therefore be modelled together. The design must avoid creating a weak incentive to save, penalising modest pension pots or promising state savings before contribution rates, investment returns, retirement ages and transition costs are known.
Policy relationship
The aim is more funded retirement income — not a guarantee that private saving can quickly replace the State Pension.
7. Questions for scrutiny
The policy should be developed with workers, employers, trade unions, pension providers, actuaries, consumer groups, the self-employed, payroll specialists, tax experts and organisations representing people on low and unstable incomes.
- 01What statutory employee contribution should apply at launch, and what final rate should the system target?
- 02Should employer matching apply from the first pound earned, or should any lower earnings threshold remain?
- 03How should compulsory deductions be made affordable for workers facing low pay, debt or temporary hardship?
- 04Does 25% government tax relief mean 25 pence for every £1 paid by the employee, and how should it interact with marginal tax rates?
- 05Should the same minimum apply to employees, workers, agency staff and people in platform or gig-economy arrangements?
- 06How should self-employed people be included where there is no employer available to provide a matching contribution?
- 07Should pension pots follow the worker automatically, be consolidated into one default account or remain with separate schemes?
- 08What limits should apply to fees, investment risk, default funds and access before retirement?
- 09How should employers, particularly small firms, absorb the cost of a full contribution match?
- 10Would Policy 32’s means test reduce the incentive to save, and how should private pension income be treated fairly?
- 11What are the fiscal costs of tax relief and transitional employer support, and when might State Pension spending fall?
- 12What independent modelling, pilot evidence and parliamentary scrutiny should be required before compulsion begins?
8. Core commitment
Core commitment
Every job will build a pension. Employees contribute, employers match and government supports saving.
9. The proposed direction
Proposal 28 would turn workplace pension saving from an opt-out system into a compulsory employment standard. The contribution rate would rise gradually, with affordability tests and implementation support developed before rollout.
The precise percentage, earnings basis, age coverage, treatment of self-employment, portability mechanism and transition timetable are not settled.
This citizen-led proposal requires actuarial modelling, distributional analysis, legal review and consultation before national implementation.
Source basis: Manifesto 1.1, Part XII, Policy 31 / Major Promise 28 — Every Worker Gets a Pension, read alongside Policy 32. This citizen-led policy direction is published for scrutiny, not endorsement. Final contribution percentages and implementation details are not settled. Independent actuarial, fiscal, distributional and legal analysis would be required before implementation. Existing UK automatic-enrolment rules are provided as context, not as the final design of Proposal 28.
Read. Question. Challenge. Improve.
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