Labour market enforcement
Pensions & savings

Enrol up!

The case for strengthening auto-enrolment enforcement

This briefing note is part of a three-year programme of research exploring labour market enforcement generously funded by Unbound Philanthropy. It considers the extent of non-compliance with auto-enrolment, and whether there are ‘under-enrolment’ hotspots that require closer scrutiny.

We estimate that around 3 per cent of eligible employees are not enrolled in a pension scheme by their employers, and have not opted-out. We find clear evidence that non-compliance is more likely to affect part-time and temporary workers, agency workers, and those in lower-paying sectors where other labour market violations are often found. And Government plans to extend eligibility criteria, while welcome, will bring into scope more of those workers who are at the highest risk of being short-changed.

Now that the policy is fully rolled out, and with the risk of non-compliance set to increase as unemployment rises, a more hands-on approach to enforcement appears justified. We recommend that the Pensions Regulator (TPR) should shift to undertake more proactive enforcement of the auto-enrolment rules, alongside getting tougher, quicker when non-compliance is detected, to build on its success to date.