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.
The pension gravy train continues in the public sector
Information gleaned from official government statistics has further confirmed the growing gap between private sector and public sector pension funds. It shows that over one third of senior civil servants in Britain have a pension pot of more than £1 million waiting for them on retirement. The figures include four "mandarins" within the Scottish government in Edinburgh who can expect a pension in...Read More
PPI report highlights pensions gap
Public sector pensions remain far more generous than their private sector equivalents, new analysis has shown.The Pensions Policy Institute (PPI) said that the typical private sector pension pot is equivalent to 21 per cent of salary.It added that, while defined benefit private sector schemes averaged 20 per cent of salary, the more commonly-found defined contribution plans came to just seven per...Read More
Is it fair for public sector workers to see their pensions reduced?
As the number of final salary pension schemes in the UK private sector continues to fall, with many believing that final salary schemes will have gone over the next decade, the government's announcement regarding public-sector final salary pension schemes has been well received. It seems that Gordon Brown has finally realised the immense cost of funding these public-sector final salary schemes fro...Read More
Pension funds benefit from stock market run
Even though UK stock markets are still well below their recent highs there was some good news for the pension fund market with confirmation of a significant increase in combined pension asset values over the last few weeks. However, there are still billions upon billions of pounds required to bring the vast majority of pension schemes up to full funding with some suggesting a further 30% rise in t...Read More
Three-quarters fail to take advantage of pension tax relief
Research published by Scottish Widows has revealed that as many as three quarters of potential UK investors are not taking advantage of tax relief from a personal pension. For every pound saved in a pension, Her Majesty's Revenue and Customs (HMRC) gives a basic rate taxpayer a 22p and a higher rate taxpayer a 40p contribution. However, the research found that, of those considering financial inves...Read More