Indeed this is exactly why the Government is introducing auto-enrolement from October 2012. Automatic enrolement will get 5 million to 8 million people saving for the first time or saving more for their retirement with contributions from their employer.
People must be encouraged to save as much as they can for as long as they can, with as few savings breaks as possible, adds Patrick Connolly, head of communications at a leading IFA. He believes that the National Employment Savings Trust (NEST) – a national pension scheme into which all employees will be automatically enrolled from 2012 – will help many more people to save at least something for their retirement. UK employees will be automatically enrolled if they earn more than £7,475 per year and have been with their employer for at least three months.
Until 2016 the total annual contribution will be at least 2 per cent of an employee's earnings above £5,715, of which the employer pays in 1 per cent. From October 2018 employees must pay 4 per cent into the scheme, with another 4 per cent being made up by 3 per cent from the employer and 1 per cent in the form of tax relief from the Government.
The Department for Work and Pensions spokeswoman said: "We welcome the findings that show that the majority of people will stay enrolled in their pension as it will be a welcome boost for those who are struggling to save on their own.” But there is nothing to stop you saving independently if you want to opt out and invest through a leading IFA in Bishop Stortford.
Readers might also be interested in the following relevant articles:
Might you be in the running for a SIPP?
Saving for your retirement
Pensions and the law
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