Change is coming

As well as making it easier for people to build up a state pension, from 2012 employers will have to automatically enrol most of their workers into a pension plan. Employees can opt out of the pension plan if they want to. But if they decide to stay in – or if they take no action – then the employer has to pay a contribution of at least 3% of a band of total earnings. The employee will also have to contribute.

Employers who offer pension provision now will have to consider what changes they need to make to their pension plan. They will also have to change recruitment and administration processes. Employers will need help preparing for these changes, so that they are fully aware of their choices and options.  

The new UK coalition government and pensions

For the first time in 65 years, the UK has a coalition government – the new Conservative/Liberal Democrat alliance. The new administration has published its Coalition Agreement setting out its policy intentions. This includes plans to restore the link between basic state pension and earnings from 2011, to review public sector pensions, and to increase the state pension age to 66 faster than currently planned. The agreement also mentions investigating allowing early access to pension funds before age 55, and ending the rules to buy an annuity at age 75. It is not clear yet how this could work in practice.

Read more

Please read more in the full article (4 pages).