Pension Cash To Plummet GBP10bn

Levelling off

According to the Pensions Policy Institute, annual pension contributions could fall by £10bn by the year 2050 if no employer offers more than the proposed minimum contribution level of 3 per cent, when personal accounts are introduced.  

Head of Pensions at Standard Life John Lawson thinks the Government is taking a big gamble on how employers will act.  A lot of employers will close down their existing schemes or reduce the level of contributions when personal accounts are introduced.  

Scottish Life head of Pensions Strategy Steve Bee is of the opinion that by setting a low benchmark for employer contributions, that the Government are too caught up in trying to extend pension coverage and not too worried about increasing the total amount saved.  

Our view

Well, there is a surprise, hard pushed employers trading in one of the highest tax nations on the planet with the biggest red tape, now looking at capping benefits that they offer to staff who could have as much time off as they want for maternity, not bother to come and if they do, then demand flexible working time.  “Oh, I’ll start at 10 and finish at 2.30 pm, and no you cannot sack me”.

Useful links:

Learn more about this and related topics in the Pensions Adviser Channel

Request expert financial advice now

Purchase guidance on financial planning in the Money Shop 

Back to News Summary