Workers to be automatically enrolled into pension scheme

| October 27, 2010 | 0 Comments
Workers to be automatically enrolled into pension scheme

In a bid to encourage people to save for their retirement, the Government has announced that all UK businesses should offer a company pension scheme or enrol members of staff into the new National Employment Savings Trust (NEST).

Employees will be enrolled automatically in the scheme unless they opt out, contributing 4% of their salary. The employer will pay 3% and a further 1% will come from tax relief.

The scheme will apply to workers aged over 22 and earning at least £7,475 a year.

The Government anticipates an additional seven million will join company pensions, which will relieve some of the pressure on the state to provide for the elderly.

The new scheme is scheduled to commence next year, with all firms joining by September 2016.

Pensions Minister Steve Webb comments: “For the first time, employers will have to make pension contributions for eligible workers from 2012, ending decades of decline of membership in workplace pension schemes.”

News of the NEST scheme arrives shortly after proposals for a universal state pension, as well as the possibility of lifting the retirement age to 66 in 2020.

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