Auto escalation pensions with comments from Tom Nall, SimplyBiz Group
Auto-enrolment is currently being implemented across all UK businesses. By 2018 every employee will have been enrolled into a workplace pension to ensure they are saving towards their retirement. The programme has been widely heralded as a success, with opt out rates well below expectations.
But doubts remain over whether the contribution levels will allow savers to accumulate the funds to provide a significant income in retirement. Minimum rates currently stand at 2 per cent (1 per cent from employer, 1 per cent from employee) this will rise to 8 per cent by October 2018 (3 per cent employer, 5 per cent employee) but there are fears that such an increase – even with a hike in employer contributions – will see more workers opting out. At the same time, 8 per cent is well short of the minimum level generally accepted as necessary to accumulate adequate savings. So what can be done to encourage savers to do more?
Tom Nall, Workplace Solutions Director of the SimplyBiz Group, contributes to this FT Adviser article; please click here to read it in full.