Tuesday, June 19, 2018

Putting Away the Pennies


The Department of Work and Pensions has revealed that due to pension auto-enrolment, over half a million people will be saving for their futures by the end of 2012.

Last week saw the launch of a nationwide advertising campaign to promote auto-enrolment. It had previously been revealed that a great number of workers were still unaware of auto-enrolment and its importance. The Government has also estimated that the reforms will have led to about 4.3 million more people saving for retirement by May 2015.

It is essential that people start saving sooner rather than later, which is why the Government introduced auto-enrolment. Minister for Pensions, Steve Webb, said: "By the time all employers are included, millions more people will be saving for their old age, with more than half a million new savers in workplace pensions by Christmas. The figure for those saving is estimated at six hundred thousand. Webb added that "Few policies affect as many people, and this will be a truly radical social change. All the international evidence shows people respond positively to automatic enrolment and I'm determined to make sure that pensions are no longer seen as the preserve of the few."

The recession had meant that many people had stopped or put off saving for their futures, preferring instead to have the extra pounds now rather than later. The number of those saving had dropped significantly for both men and women. There was a fifty nine percent drop in the number of men saving and a forty four percent drop in the number of women saving compared to figures from 1997. People need to understand that they cannot just rely on the state pension to get them through. Significantly, employers will also be making a three percent contribution to savings, which should hopefully act as a further stimulus to savers.

Director for Employment at CBI, Neil Carberry, said: "As the UK's ageing population continues to increase, we need more people to start recognising the value of saving for retirement. Auto-enrolment will help rebuild a positive savings culture in the workplace and encourage people to take control of their retirement plans. It will help the country adapt to the happy challenge of rising life spans gradually over time, and avoid a future pension funding crisis."

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