The UK government today unveiled its long-awaited response to the Pensions Commission in a White Paper. Among the key elements were the launch of a new national pension savings scheme based on personal accounts and the extension of the Financial Assistance Scheme, the BBC said. The new accounts, from 2012, would see employers contribute 3% of salaries, employees 4% and the government 1%. The employer contribution would be phased in over three years. Employees will be automatically enrolled but may opt out.
The UK’s pension industry appears split over the government’s proposed national pensions savings schemes. Investment providers have welcomed the idea but consulting firms have warned of higher costs and unintended consequences. The government White Paper, following up on the Pensions Commission proposals, said it would introduce a new low cost savings scheme in which employees will be automatically enrolled. It said: “This will create a new savings culture in Britain; up to 10m people will be saving in these personal accounts and most of the money paid in will be new pension saving. By retirement, their pension funds could be worth up to around 25% more because of lower charges.”
Investment & Pensions Europe – IPE.com