Government reviews pension enrolment guidelines
The UK government is believed to be reconsidering the level at which employees in the UK would be automatically enrolled into a pension scheme as well as a potential exemption for small companies. The original changes, which would see hundreds of thousands of employees in the UK automatically enrolled into pension schemes, are set to come into play in 2012 although we may see some changes to the original guidelines before then.
The proposed changes could see the threshold for joining such schemes increase from £5,000 per annum to anywhere from £10,000 per annum. The main concern of the government seems to be the possibility that a very small pension fund would in reality simply replace means tested benefits and be of little assistance to low-income workers in the UK. Whether this is the case remains to be seen but the authorities are certainly reconsidering their initial recommendations.
A number of authorities in the UK representing small businesses have been lobbying the government for some time for exemptions for those with fewer than five employees where potentially the cost of setting up the arrangements becomes "non-cost-effective". We are likely to see major changes between now and the proposed introduction date of 2012 with a number of different authorities and bodies around the UK lobbying the government for a number of changes.
Government announces changes to pension age
The UK government has today brought forward the increase in state pension age to 66 years from 2020 which is a significant six years earlier than previously indicated. Buried in the back of the comprehensive spending review there are also plans to accelerate the increase to 68 years with an option to increase the pension age above and beyond 68 years. So what will this save the UK government in th...Read More
Are you saving enough for your retirement?
While the recent economic downturn has hit many people in the UK there are concerns that it has exposed a lack of preparation for the future and for retirement. It is believed that almost half of those over 55 do not have any monthly savings plans in place and indeed 20% are estimated to owe at least £75,000 on their mortgages. The very fact that the situation for those over 55, and struggling...Read More
BBC looks to future with new pension arrangement
The BBC is a tackling its £2 billion pension deficit with a new proposal to employees which would see their pensionable income based upon an average of their earnings over a career rather than their final salary figure. If pension fund trustees and pension fund members agree to the change in pension base calculation the BBC will also eliminate the 1% annual cap on the growth of pensionable salari...Read More
How much do you need to retire?
A report by MGM Advantage claims that the average couple in the UK will require £600,000 to be able to enjoy 20 years of retirement. While there is a large variation in the cost between the South and the North of England, with London couples said to require £194,602 more than their northern counterparts, it will come as a shock to many in the UK. The report also suggests that the cost of livi...Read More
Is the forthcoming pension crisis going to affect you?
If you are currently under retirement age then the chances are that the changes in the UK state pension in the future will affect you. As we covered in one of our earlier post, the Pensions Regulator has suggested that UK workers needed to continue employment into their 70s in order for the government to avoid a massive pensions funding crisis.
This is a situation which will affect...