Today’s launch of auto-enrolment marks the biggest change in pensions for over a hundred years, the pensions minister has claimed.
Politicians, employer groups and pension bodies have all presented a united front on the launch of auto-enrolment.
The Confederation of British Industry said the policy was essential to prevent a future pension crisis in the UK, while the TUC said it would reverse the decades of decline in workplace pension provision.
The NAPF said work needed to be done to make sure the pensions people were automatically enrolled into were good value.
Steve Webb, minister for pensions, says: “We are proud to be introducing this truly historic change, which will radically alter the way we save for our old age, and see millions more people putting something aside for the future.
“Between now and 2018, more and more employers will come on stream – right down to the smallest ones.
“If we can get between 6 and 9 million more people saving in a pension by the time all employers are in, that’s a genuine savings revolution.”
John Cridland, director general of the CBI, says: “The UK needs a renewed focus on long-termism if we are to secure sustainable private sector growth and rebalance the economy. That means taking bold, visionary action now to address the problems we expect to face in the future – and few challenges are more pressing than rebuilding a culture of saving. Boosting pension saving is essential to caring for our ageing population and increasing investment in our economy.
“Auto-enrolment is the right way to meet the challenge. The 1st of October marks a new dawn for pension saving, with many millions of employees being given the opportunity to save towards a pension and benefit from an additional contribution from their employer. The change is rightly being phased over many years, to ensure it remains affordable for businesses in these tough times.
“The business community is committed to helping employees to achieve a good income in retirement. Auto-enrolment will encourage them to think long-term about their finances to achieve this goal.”
Brendan Barber, general secretary at the TUC says: “UK workplace pensions were once the envy of the world. But too many employers have walked away from their responsibilities, and now just one in three private sector workers are in a pension, threatening many with a miserable retirement.
“This is why automatic enrolment into pensions is so welcome. Every employer will now have to play their part – a victory for many years of union campaigning.
Joanne Segars, chief executive, NAPF says: “This is a game-changer that will get millions of people saving for their retirement. The UK is drifting towards an iceberg when it comes to paying for its old age, and we need radical reform like this.
“Crucially, this reform will reach those who have no pension – the young, the low-paid, and those working for small businesses.
“It’s important that people are put into well-managed, high quality pensions that offer good value for money. We have to bolster faith in the system, and there’s no point bringing workers into a bad pension which they then turn their backs on.”