Pension reform 2012: are you ready?
The government’s proposed 2012 pension reforms will oblige employers to offer a private sector pension scheme, known as a Personal Account, to all eligible employees who are not covered by in-house alternatives.
• The 2012 pension reforms oblige employers to automatically enrol employees into private sector pension schemes
• Employers m ust set up the pension schemes, known as Personal Accounts, but employees can opt out of them
• To soften the blow, the reform will be gradually introduced, and small businesses will not have to be fully compliant until 2015 or 2016
• Contributions to the pension schemes will be shared among employers, employees and the government
People are living longer lives. This means people can enjoy more time in retirement and need to plan and save for their later years. The Government estimates that around seven million people are not saving enough to meet their retirement aspirations. Therefore the Government is making changes to the pension system.
Changes being introduced from April 2010 mean that the State Pension will be fairer and available to more people. The State Pension will be a foundation for retirement but most people will want to build up their own savings on top of this. To encourage more people to save in a private pension the Government is planning to introduce workplace pension reforms from 2012.
For further information click here