12 December 2006
Plans for the automatic enrolment of workers into a new pension
system are to be unveiled by the government.
From 2012, workers not in occupational pension schemes will be
enrolled in "personal accounts" unless they opt out, under the
White Paper plans.
Staff will pay in 4% of their salaries and employers 3%, with an
extra 1% from the government in tax relief.
However, some small businesses have objected to the idea of
compulsory contributions.
The proposals would affect up to 10 million workers who are not
in employer-funded schemes.
The system's key feature is that employers will be forced to
contribute if their staff join up.
The government hopes the scheme will help plug the gap in the
nation's retirement savings and supplement the continuing state
pension and private pension systems.
The idea was first proposed by Lord Turner's Pensions Commission
to ensure that more people save for retirement.
