This week Peter Hain was announced as the new Work and Pensions Secretary, replacing John Hutton.
One of the first issues the new Minister will need to tackle is the growing regulatory burden currently facing workplace pensions schemes. Many put the blame firmly at the Government’s doorstep saying that the Government needs to come forward with serious proposals to ease the cost pressures on hard-pressed pension scheme sponsors and to encourage workers to enroll in pension schemes in the first place. The rules and regulations surrounding pensions can be confusing and many people, especially those far away in age to retirement will rather spend their money in the here and now rather than thinking so far ahead into the future.
The new Minister will have an opportunity to act quickly the Government have published details of a new savings scheme which will give all employees the right to a workplace pension with a contribution from their employer.
Personal Accounts, as it is called, plans to increase levels of savings by automatically enrolling employees into the new scheme.
Support for the plan can be found in the research report, Attitudes to
Pensions, which revealed that:
• 84 per cent of people surveyed supported the idea of a national pension savings scheme
• 68 per cent supported automatic enrolment, particularly if there was an employer contribution
However, the research also showed that 29 per cent of people prioritize spending today over saving for tomorrow.
With this in mind personal accounts are designed to be ‘hassle-free’ to help encourage people to save.
Planning now for your retirement will obviously be of benefit to you in the future; even putting a small amount aside each month could make a difference in the future. However, working past the retirement age to supplement a
pension may always be common as our life-expecting grows, we may want to keep active for longer.
James Quinton is a writer based in the UK. He has had articles published worldwide. Compare
pension products online.
