Insufficient pension concerns as auto-enrolment continues

13 Feb 2014

Employees are being urged to make greater  contributions to their pension funds, as the Pensions Regulator reveals the  latest auto-enrolment figures.

Larger businesses have been auto-enrolling staff  since 2012. Based on their earnings, mandatory input from employees is 0.8%,  with an equivalent of 1% paid in by the employer and 0.2% by the Government in  the form of tax relief. This applies only to staff aged 22 or over, who earn at  least £9,440 per year.

With 90% of both employers and employees making  only the minimum payment, concerns have been raised about amounts actually  being saved for the future.

With auto-enrolment happening in stages, the  coming months will see medium sized businesses – employing 50-250 workers –  needing to meet the legal requirement of providing a workplace pension.

Employers can check their staging date at www.thepensionregulator.gov.uk.

Experts and ministers recommend people start  savings for a pension as soon as possible in their working lives, in order to  top up the state pension when they come of age.

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