Belfast Telegraph

Force staff to take out a pension, says report

Press Association

People should be forced to put money into a pension in the same way that they have to pay taxes, according to a think-tank.

Policy Exchange said that a "help to save" scheme should be set up, which would remove people's ability to opt out of the workplace pension scheme they are placed in under the Government's landmark reforms to boost retirement saving.

Automatic enrolment into pensions was launched in autumn 2012. To date, a lower-than-expected rate of one in 10 employees are opting out once they have been placed into a pension scheme, but Policy Exchange said this level may rise as smaller firms are brought into the initiative.

Ideally, a 12% contribution rate should be targeted over the next five years rather than the 8% rate in operation, the report said.

The 8% rate is made up of 4% from employees, 3% from companies and 1% from the Government in the form of a tax credit, but the report said that instead, the 12% rate should be comprised of 6% from employees, 4.5% from companies and 1.5% from government.

The paper said that these measures would help to defuse a "pensions time bomb".

Belfast Telegraph