Automatic Enrolment gives new pension security to thousands
More than half a million people will be saving in a workplace pension for the first time by Christmas, according to new government figures.
From October 2012, starting with the largest employers, the automatic enrolment initiative means that bosses will be required by law to pay into a workplace pension for all eligible staff who do not opt out.
The DWP figures reveal that by the end of the year around 600,000 more people will be saving into a workplace pension. By May 2015, around 4.3 million more people will be saving for their retirement.
Steve Webb, Minister for Pensions, said: “Automatic enrolment is the biggest boost to pensions for over a century. By the time all employers are included, millions more people will be saving for their old age, with over half a million new savers in workplace pensions by Christmas.
Up to 11 million people are expected to be eligible for automatic enrolment, with six to nine million newly saving or saving more in all forms of workplace pension schemes.
Under automatic enrolment, employers will eventually contribute three per cent of earnings, individuals four per cent of earnings, and there will also be one per cent of tax relief to make up a total contribution of eight per cent.
Employees are able to opt out of auto-enrolment if they wish to do so.