Low earners lose pension benefit
Millions of low earners who were meant to gain from the Government’s plan to restructure pensions will actually be left worse off, it has been claimed.
According analysis of the pensions White Paper by Standard Life, many lower earners will end up paying for pension benefit that they currently get from the State.
Half of all workers made to pay into the planned National Pension Saving Scheme (NPSS) will be effectively paying for benefits they already get for nothing.
Standard Life calculates that anyone over the age of 42 who earns £20,000 a year or less will be worse off when they are forced to pay 4% of their earnings into the NPSS, which the Government intends to introduce in 2012 following recommendations made in the Turner Report.
Standard Life says that 35 year olds earning £10,000 or less would also be worse off, and that lower earners would be better off paying into an ISA instead.