Governments throughout the last 20 years have attempted to respond to the crisis by either highlighting its scale or introducing unbinding initiatives - largely without success. Only 3 in 10 private companies currently have pension provision and the over 60's are set to grow by 40% over the next 30 years. To pre-empt the inevitable crisis automatic enrolment pension legislation will begin to be rolled out in the coming days.
The legislation is currently only applicable to a selection of the UK's biggest companies with the roll out being staggered over 5 years. By the end of this period, every UK company and every eligible UK citizen will have been subject to auto enrolment pension legislation.
In short, automatic enrolment pension legislation will see everybody over the age of 22 and earning more than £8,105 per year automatically enrolled in a pension scheme - as long as they ordinarily work in the UK. You do retain the right to opt out of the scheme but you will be re-enrolled every 3 years. As long as you opt out within the given time frame your contributions will be refunded; if not they'll stay in your pension pot.
The scheme has the prime purpose of attempting to get the lower paid into pension schemes. Many who work in small shops or as nannies, carers etc. won't have been exposed to pension schemes before, and many that have may have been reluctant to join without any real push in that direction. Money is often more important or even vital in the here and now rather than for future planning. These people may still opt out, but those who have merely avoided the question or may have the spare capital will most likely surrender to the automatic enrolment pension legislation at some point.
Companies should begin to seek advice if they have no pension provisions in place and will be notified as to when their staging period will be. There will be government approved NEST schemes on hand to fill much of the pension void.
