By Alexandra Morgan

The Herald
Saturday 28 September 2013

Next week sees the first anniversary of automatic enrolment into pensions at work, the government's flagship policy aimed at boosting the UK's depressed levels of retirement saving.

Over the past year, more than a million employees of large firms have been covered by the new regime; from October 1 it will reach firms with 800 employees; and from November, 500, so many more workers will start to see new deductions on their payslips.

However, it will be 2017 before all employees find themselves obliged to be enrolled in a company-sponsored scheme, unless they opt out within a month.

But whenever they are enrolled, anyone who assumes their pension provision requires no further thought risks a nasty shock when they give up work. ......

...... Auto-enrolment is designed to ensure most workers have more than the state pension to live on in retirement. Eventually, all employees between 22 years old and state pension age who are not already in a company scheme and earn at least £8105 a year will have contributions deducted directly from their wages.

These will be invested and, from the age of 55, or when they retire, they will be able to buy a pension with their accumulated sum.

The self-employed are still expected to make their own arrangements though, through personal pension plans and other forms of saving.

Anyone can choose to opt out, but those who do will suffer financially in old age unless they make alternative arrangements. ......

...... David Scott, an independent financial adviser with Alan Steel Asset Management, said: "People need to take control of their own destiny, and whether a company scheme is available or not, they should be saving for their retirement now.

"As and when they get a chance to join a company scheme, then that is an added bonus. They can then decide to join the new plan and make their personal pension paid up or pay into both."

Quote courtesy of The Herald
Saturday 28 September 2013