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Companies could waste £2bn a year due to auto-enrolment

Creative Benefits has warned that UK companies will throw away £2.1bn a year as a result of the Government’s automatic enrolment reforms.

The employee benefits consultant says over four million private sector employees, or 20 per cent, will not benefit from pension saving because they either have pressing debt obligations and should opt out or could get the same income from the state at retirement by not saving.

Development manager David Marlow says if everybody remained in auto-enrolment, the total cost to businesses would be about £10.5bn a year.
Marlow says 20 per cent of that expenditure, or £2.1bn, would not provide good value for money.

He says: “We have serious concerns about the cost of auto-enrolment on British SMEs. We are not against auto-enrolment as a policy because there is a massive savings gap in the UK but in our view a lot of people will potentially get poor value for money.

“Auto-enrolment is a blanket approach and because there will be a lot of apathy from consumers, people will not be making informed decisions. Lumping everyone into the same scheme is extremely dangerous.”

AWD Chase de Vere head of communications Patrick Connolly says: “I think auto-enrolment has the potential to work very well for the vast majority of people.”



FSA swoops on Castlestone offices

Castlestone Investment Management claims the FSA’s investigation into the firm is not related to criminal offences following last week’s raid by the regulator. Last week, the FSA executed search warrants on Castlestone premises in London and Chichester. The City of London police confirmed they were involved in the execution of the regulator’s London searches. In […]

‘We had no option,’ says Katz

Aifa council member Harry Katz says the trade body had no option but to broaden its membership criteria as its current structure is no longer financially sustainable. Katz, principal at Norwest Consultants, says Aifa needs resources to lobby. He says: “There are plenty of small IFAs that subscribe to Aifa but I do not think […]

Pressing matter

The News of the World phone-tapping scandal may well result in statutory regulation of the press. The skulduggery and shame being paraded publicly mean that there will be little resistance to the basic demand of public opinion that “someone sort this out”. In such situations, that someone must be the Government of the day. As […]

MPs want ICB to review retail banking total split

The Treasury select committee is concerned that the Independent Commission on Banking has not given enough consideration to a total split of retail and investment banking. The ICB’s interim report, published in April, proposed ringfencing retail banks within wider banking groups and making them hold at least 10 per cent core tier-one capital. The TSC’s […]


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