Is there a case for some sort of compulsory savings scheme?

Is there a case for some sort of compulsory...

Didn't find your answer?

Apparently 6m people in the UK have no savings whatsoever!  Is there a case for a compulsory savings scheme for people who are in work and paying tax?  Why should those of us who DO save have to then pay for those that do not (e.g. minimal unemployment benefit if you DO have savings; the sky's the limit if you do not!!!)?

How would we prevent a possible raid by a future government if such a scheme were to be brought in?

Replies (3)

Please login or register to join the discussion.

the sea otter
By memyself-eye
30th Jun 2011 10:37

There is one

Or rather there will be.

From 2012 and starting with the largest companies, employees will be auto enrolled into a national pension scheme with employers being legally obliged to contribute 3% of salary, employees 4% and HM Gov, err...1%!

Employees can opt out but only after they've been opted in.

As with the 'stakeholder pension' farce, more work for employers, many of who will Decrease the amounts they currently contribute to their staff pensions, mass opt outs for low paid employees and zero pay increases to cover the 3% increase in wage costs. Needless to say the combined pot of 8% a year will buy b*gger all pension.

Any staff with their own (ie non company) pension scheme where their employer also contributes, will not be able to have the new scheme applied to that plan so will have to set up a new one or opt out.

Maybe this should apply to the striking public sector workers who feel so hard done by....

 

 

Thanks (0)
avatar
By neiltonks
30th Jun 2011 11:21

Not a universal scheme

The pensions reform proposals are far from being a truly useful universal savings scheme.

For  start, anyone under 22 or earning at a rate less than £7,475 doesn't have to be automatically enrolled, which excludes a lot of young and low-paid part time workers. And of course many who are enrolled will opt out.

The percentages quoted only have to be applied to pay between £5,035 and £33,540, which certainly means that lower paid workers will never accumulate a useful pension entitlement even if they are enrolled into the scheme. Someone just over the £7,475 threshold will have an investment of a little less than £200 a year, which isn't going to buy much of a pension! The employer cost of that will be around £74 a year.

Also, the full percentages don't apply until October 2017. Prior to that the employer contribution is 1% until October 2016 and then 2% for a year before increasing to the full 3%.

Which brings us back to the original question of why should those of us who work for employers who do provide a reasonable pension scheme end up subsidising those whose employers don't do this?

Neil.

 

Thanks (0)
avatar
By johnjenkins
30th Jun 2011 14:17

Tax Payers

work hard for their money so it is up to them how they spend it. Don't forget quite a lot do not have any disposable income to save.

Having said that I do think there should be some sort of compulsory pension scheme, the deductions of which go into a scheme and not into the "pot"

Thanks (0)