Can You Afford A Compulsory Pension?

Can You Afford A Compulsory Pension?

A survey conducted by B and CE Benefit Schemes found 28 per cent of workers were unsure if the proposed 4 per cent contribution into personal accounts would work for them.  Some 39 per cent of workers not currently saving for retirement felt they could not, or did not know if they could afford the 4 per cent contribution.  

Just over a third of workers who were not currently saving for retirement claimed the cost of living prevented them from doing so.

Our view

People will have to change their spending habits as the compulsory Personal Account is on its way in 2012.  

Employers will also be forced to pay in 3% for staff and we suggest that employers consider reducing pay rises and start pension payments so that the impact of forced contributions is in place well ahead.  There is no point in having to pay 3% of a higher salary in 4 years when this could be built into pay negotiations.

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