July 31, 2013

Million workers now a part of auto-enrolment pensions

The pensions regulator has reported that there are now one million employees involved in auto-enrolment, according to myfinances.co.uk.

The information was included in the organisation’s monthly automatic enrolment registration report. All employers have to register their information with the regulator.

All of the largest firms in the UK began to enrol their workers into pension savings from October last year. Medium-sized and smaller firms are now set to follow up until 2018.

Talking about the landmark figure, Minister for Pensions, Steve Webb, told freshbusinessthinking.com: “This is the biggest change to the pensions system for a century. The money workers save is being matched by contributions from their employers and topped-up by tax relief, helping them put money aside for their retirement, many for the first time.”

Currently the minimum contribution for an employer is one per cent, however this will increase to at least three per cent by 2018.

The scheme has been put in place to make sure employees are raising finance for their future retirement after it had been found that many pensioners struggle to survive on what they have accumulated throughout their working career.

The Office for National Statistics (ONS) reported last week that private section pension savings reached an all-time low in 2011-12, claiming that the number saving into a public sector pension had fallen to 8.2 million. This is the lowest level since 1956.

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