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The new 'opt-out' pension scheme where employees are automatically enrolled in to saving for their retirement could cause a false sense of security among savers, says Ros Altman:
11 million people in the UK don't save enough for their pension at the moment according to Iain Duncan Smith:
According to government figures, fewer people are saving for their retirement nowadays and the numbers are dropping. This trend is most pronounced among men and for people below the age of 30.
- 24% of people aged 22-29 save compared with 43% in 1997
- 44% of men save compared with 59% in 1997
- 39% of women save compared with 49% in 1997
The Department for Work and Pensions has secured the services of Dragon's Den star Theo Paphitis to lead its advertising campaign for automatic enrolment.
The advertisement runs on TV until the middle of October.
- 11 million people in the UK are not saving enough for their retirement.
- Automatic enrolment will get up to 9 million more people saving.
- Pension saving has fallen across the board, especially among young men.
- 600,000 more people will be saving into a workplace pension by Christmas and 4.3 million by May 2015, the Government predicts.
Automatic enrolment is a new initiative by the Government to get more people to start saving towards their pensions.
Under it, employers will be required by law to pay into a workplace pension for all eligible staff who are over the age of 22 and earn more than £8,105 a year.
Employers will eventually contribute 3% of earnings, individuals 4% of earnings and there will also be 1% of tax relief to make up a total contribution of 8%.
You can opt out but if you do you will not be eligible for the extra contribution from your employer or the tax relief, and you will be automatically re-enrolled every three years.
The scheme will kick in from October starting with the largest employers.
More than half a million people will be saving in a workplace pension for the first time by Christmas as a result of automatic enrolment, according to the government.
The Department for Work and Pensions says that number will swell to 4.3 million people by May 2015.
Automatic enrolment - where employees will start automatically paying a proportion of their salary into a pension fund unless they opt out - will be introduced from October onwards. It marks the biggest change in pensions for more than a century.
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