The government has unveiled a new name for its proposed national pension saving scheme due to launch in 2012, changing the brand from a working name of ‘Personal Accounts’ to the ‘National Employment Savings Trust’ (Nest)
Nest will be a new defined contribution pension scheme, designed to give millions of low-to-moderate earners a contributory workplace pension. All employees whose companies don’t have an equivalent or better pension scheme will be auto-enrolled into Nest from 2012 onwards, with their employer forced to make a guaranteed minimum contribution of 3% of salary.
Employees will be forced to pay in a minimum of 4%, while at least one additional percent of salary will be added into the scheme via tax relief. Workers will be entitled to opt-out, but it is envisaged that millions will elect to have personal accounts administered by the new Trust.
The new scheme was outlined in the Pensions Act of 2008 and marks a significant development in the provision of workplace pensions. At the moment millions of low-paid workers get only the basic state pension as their employer doesn’t offer a suitable workplace scheme into which they can save for the future as they earn.
Launch welcomed by Which?
Welcoming the launch of the National Employment Savings Trust, Which? Personal Finance campaigner, Doug Taylor said: “This is another important milestone on the road to 2012. Consumers want a brand they can trust working for them and the best return they can get for their contributions. We believe that Nest will deliver that. Millions of low to middle income consumers will now be able to look forward to a more comfortable retirement.”
To find out more about the new scheme, read our .
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