Personal accounts roll-out a casualty of Chancellor’s austerity drive

THE FULL roll-out of personal accounts and automatic enrolment will be delayed until 2017 to reduce the amount of tax relief given away by the Treasury, but large employers will still have to start contributing into the scheme from 2012.

In last month’s pre-Budget report, Chancellor Alistair Darling said the decision to delay the rollout of automatic enrolment and personal accounts
was one of a series of “tough but necessary choices” to cut public spending. The Department for Work and Pensions says delaying roll-out will
save the Government around £2.4bn in tax relief between 2012 and 2018. It adds that press reports this morning that the 2012 implementation
date was being put back were incorrect.

The DWP says large employers will be required to meet the October 2012 deadline for contributing 1 per cent of band earnings into either a qualifying pension scheme or personal account. But full implementation will now be spread over five and not three years, although the DWP said it had not yet been decided whether large employers would not have to make the full 3 er cent contribution until 2017. Details of how much employers will be required to pay when, and when smaller employers’ duties will commence are being finalised and a further announcement is expected in January 2010.