A RADICAL reform of UK workplace pensions begins today.
Automatic enrolment into a workplace pension, will affect an estimated nine million people. For many workers, this will be the first time their employer has contributed to their pension savings.
However, the Institute for Fiscal Studies says that the impact on total saving is “ambiguous”.
Under the new scheme, a slice of a worker’s pay packet will automatically be diverted to a pension pot, assuming they are aged over 22 and not already part of a workplace pension scheme.
Only the largest employers, such as the big supermarkets, will be involved in the first wave of automatic enrolment. Others will then join as the system is rolled out. The smallest firms will not sign up their staff until June 2015 at the earliest.