Govt predicts 600k auto-enrolment impact by year end
Firms with over 120,000 employees will have to pay into a workplace pension for all eligible staff who do not opt out from next month, with the phasing in of the scheme continuing until 2018.
Figures released by the Department for Work and Pensions (DWP) suggest about 4.3 million more people will be saving for their retirement by May 2015, with 600,000 of these coming by the end of this year.
Steve Webb, minister for pensions, said: “Few policies affect as many people and this will be a truly radical social change.
“All the international evidence shows people respond positively to automatic enrolment, and I’m determined to make sure that pensions are no longer seen as the preserve of the few.”
The DWP believes up to 11 million people are expected to be eligible for automatic enrolment.
Under the scheme, employers will eventually contribute 3% of earnings, individuals 4% of earnings, while there will also be 1% of tax relief to make up a total contribution of 8%.
Earlier this week, Scottish Widows rolled out its auto-enrolment platform, AssistMe.