Pensions: Automatic enrolment system timetable revealed

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Media captionThe Pensions Minister Steve Webb told BBC News that he expects 'about two thirds' of people who are enrolled to stay in the new system

Some 600,000 people are expected to be enrolled into a workplace pension by the end of the year under a new system that automatically diverts funds from their pay packet.

The automatic enrolment scheme begins on 1 October and will mark one of the biggest changes to the pension system in the UK.

It will start with the largest firms.

Employers and staff will pay contributions into pension savings unless the worker opts out.

Workers aged over 22, earning more than £8,105 and not already signed up to a workplace pension scheme will be automatically enrolled into a pension scheme.

However, this system will be phased in gradually, with workers in the smallest firms not seeing a change for a few years.


The Department of Work and Pensions (DWP) has outlined more details on the number of people expected to be signed up during the initial waves.

It estimates that 380,000 workers will be signed up in October, a total of 420,000 will be enrolled by the end of November and 600,000 will be in place by the end of the year.

The enrolment peak is expected to be next spring. Overall, 11 million people will be eligible. Pensions Minister Steve Webb estimates that between six million and nine million people will stick with the pension saving, rather than opt out.

The aim is for more people to save for their retirement, rather than relying solely on the state pension.

Under automatic enrolment, employers will eventually contribute 3% of earnings to a worker's pension pot, employees will have 4% of their earnings diverted and there will be 1% tax relief.

However, these contributions will also be phased in gradually, starting at about 1% of earnings paid in by the employer and employee.


The system has been welcomed by various business and workers' groups.

"As the UK's ageing population continues to increase, we need more people to start recognising the value of saving for retirement," said Neil Carberry, the CBI's director for employment.

"Auto-enrolment will help rebuild a positive savings culture in the workplace and encourage people to take control of their retirement plans."

TUC general secretary Brendan Barber said: "This is a truly historic advance. For the first time, every employer will be compelled to contribute to the pensions of their staff - a union objective for many years.

"This government deserves praise for taking forward the plans put forward by the Pensions Commission under the previous administration."

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