The Treasury Minister has ruled out introducing automatic workplace pensions during this current administration, despite calls to align with UK participation rates.
In the UK any worker earning over £10,000 a year is automatically enrolled into a workplace pension.
During Tynwald questions on Tuesday, Dr Alex Allinson acknowledged the growing gap in retirement savings between the Isle of Man and the UK, where 88% of eligible workers are enrolled in workplace pensions.
Jason Moorhouse MHK pressed the issue, asking: “Given that high figure, doesn’t it suggest this is a positive thing to do?”
Dr Allinson confirmed the Treasury has studied schemes elsewhere, including Guernsey’s phased auto-enrolment, but stated: “There are no current plans to legislate.”
He warned of economic risks, noting: “During downturns, pensions can be the first thing cut.” He also highlighted the burden on small employers facing potential contribution costs.
Chris Thomas MHK raised concerns about unequal treatment of UK employers on the island and called for “precise costings” to avoid overburdening businesses.
Dr Allinson agreed, suggesting a unified Manx scheme could provide “economies of scale” for smaller firms.
With only a third of residents claiming pension tax relief, the Minister stressed: “The state pension should be a safety net, but people must plan ahead.”
Mr Moorhouse cited Aviva research linking workplace pensions to improved recruitment, but Dr Allinson maintained any future scheme would require careful implementation, particularly for low earners.
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