Pensions auto-enrolment begins next month
Auto-enrolment into a work pension is due to begin next month, in a shake-up described by Government as a “truly radical social change”.
From October 1, the largest employers must place eligible workers into schemes, with all other firms to be gradually enrolled in a staging process over the next six years.
The Department for Work and Pensions has projected that by May 2015, 4.3 million more people will be saving for their retirement.
The move comes amid growing concerns over an increasingly ageing population accompanied by a failure to save. Statistics from the ONS show that the number of private sector workers saving is now at the lowest level since records began, with just 2.9 million people paying into schemes.
Iain Duncan Smith, secretary of state for work and pensions, said: “Automatic enrolment will get up to 9 million more people saving into a workplace pension, and for many it will be the first time they have had the opportunity to save.
“It will allow people to start planning for their retirement and this will make it easier for them to start putting something aside, along with a contribution from their employer.”
Steve Webb, pensions minister, said: “Few policies affect as many people, and this will be a truly radical social change. All the international evidence shows people respond positively to automatic enrolment, and I'm determined to make sure pensions are no longer seen as the preserve of the few.”
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