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Millions more will be saving in Pensions - 02-12-2008 |
Up to 9 million people, many of them on low and middle incomes, will get access to a workplace pension, or will be able to save more, now that the Pension Act 2008 has received Royal Assent.
From 2012 workers will either be automatically enrolled into their employer's workplace pension scheme or entered into the new Personal Accounts scheme, ensuring those who in the past have not had the opportunity build up any savings for retirement can now do so. This landmark piece of legislation represents a key element of Lord Turner's Pension Commission's recommendations to help more people save for retirement.
Welcoming the passing of the Act, Secretary of State James Purnell said:
"This Act will fundamentally change the pensions' landscape for millions of people. It will no longer matter if you are in a low-paid job or you don't have a regular working pattern. If you are in some form of employment you will now have the chance to save for your retirement.
"As people are living longer and have higher expectations from their retirement, the need for us to take action was clear. Auto-enrolment and Personal Accounts deliver on the key recommendations from the Pensions Commission's report on helping millions of people to save for later life.
"Alongside the reforms made to the state system last year, we now have a pensions' settlement both in private and state that is fair, meeting the needs of people who in the past may have felt the system was not working for them."
Minister for Pensions and Ageing Society, Rosie Winterton said:
"It is estimated that there are around 7 million people in the UK who are not saving enough to generate the pension income they are likely to want, or expect, in retirement.
"But now, those who work for small employers, the local supermarket or pub for example, will get access to a workplace pension.
"With individuals' minimum contributions matched £1 for £1 under the new reforms by the employer and tax relief, plus years of investment growth, these measures provide a strong incentive to save.
"We have worked closely with all groups who have an interest in delivering a pensions system that is fair to all and can encourage saving. It is now up to all of us to help deliver on this new settlement."
Tim Jones, Chief Executive of the Personal Accounts Delivery Authority (PADA) said:
"The passing of the Pensions Bill into law enables PADA to get on with delivering the personal accounts scheme. That work now starts in earnest - we will, for example, start the procurement process for the core administration functions of the personal accounts scheme in January 2009. We are well placed to achieve our aim of helping millions save for their retirement and are ready for the challenges that lie ahead."
Pensions Regulator chief executive Tony Hobman said:
"We welcome the new objective given to us by the Act and will be working to maximise employers' compliance with their responsibilities. We have begun some of the early preparation of this work and will apply our risk-based approach, continuing to focus on educating and enabling with enforcement as a last resort."
The Bill also contains a number of significant measures to simplify and strengthen the existing pensions system. These include those to allow eligible people, particularly women, to buy additional National Insurance Contributions and measures to allow DWP data to be shared so that energy companies can identify people who may need assistance with their fuel bills.
| Department for Work and Pensions
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