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Welfare Reform on the Web (October 2005): Pensions - UK

Manufacturers give backing to compulsory pension schemes

C. Seib

The Times, Sept.1st 2005

The EEF, Engineering Employers' Federation, has come out in favour of compulsory pension saving. It argues that employers and workers should pay 2% of earnings into a pension scheme by 2015, rising to 4% each by 2025. Government should make payments on behalf of those on less that 25% of average earnings.

Millions have lost in opting out of second state pension

R. Knight

Financial Times, Aug 25th 2005, p.3

Reports from the Financial Services Authority and Which? Magazine have shown that millions who opted out of the second state pension and invested in private schemes have lost money. The FSA has warned that insurance companies which enticed workers to transfer their savings to risky private schemes could face a miss-selling investigation and heavy fines..

(See also Financial Times, Aug.30th 2005, p.4)

NI rebate warning on second pension opt out

A. Joliffe

Financial Times, Aug. 30th 2005, p.2

In return for opting out of the second state pension, companies and individuals receive a rebate on their national insurance contributions. The rebate for individuals is to compensate workers who have given up their entitlement to the second state pension; that given to companies compensates them for taking on a pension liability from the state. Watson Wyatt, a pensions consultancy, has warned that the government is not giving enough in rebates to enable companies to provide the promised benefits.

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