Lib Dems call for auto-enrolment ‘national information campaign’

Nick Clegg LibDem Rally 2012 Sep 480
Former Lib Dem leader Nick Clegg

The Liberal Democrats have called on the Government to provide the public with more information about auto-enrolment in the wake of imminent contribution rate rise.

From April this year, employees must contribute a minimum of 3 per cent of their salary, increasing to 5 per cent from next April.

While currently only around 10 per cent opt-out of auto-enrolment, the Liberal Democrats are warning that this rate could increase if workers are not prepared for a fall in their take-home pay.

Liberal Democrat work and pensions spokesman Stephen Lloyd says: “With wage growth still lagging behind inflation, it is understandable that many working people will be anxious not to see their pay fall further. But paying into a workplace pension now is a profit for the rest of your life. That’s why I’m calling on the Secretary of State to instigate a national publicity campaign to explain to workers what is happening and what the consequences of the different courses of action are.”

The party has been increasing vocal on pensions issues in recent weeks, calling for an end to contingent charging and a faster timetable to ban cold-calling.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Quite right the public deserves more information:

    1. You are about to get a 3% reduction in your pay, rising to 5% from April.
    2. This will buy you a very second rate pension.
    3. Your employer has to contribute as well, making a rise in wages even less likely.
    4. The poor pension you will most likely get if you are now age 40 or over will of course cut back on any state benefits in a addition to the State pension for which you may have been eligible.
    5. Just on case you were in any doubt your National Insurance contributions are in fact nothing of the sort. They don’t specifically pay for your state pension or NHS, but it is just another tax.
    6. Yes, you should make provision for your old age. If you decide on a pension, or an ISA or Insurance bonds go and see a good independent financial adviser who will be able to help you. You can take tax free income from ISAs when you retire (remember your pension will be taxed). If you are (and will remain) a basic rate taxpayer there is no tax on income from insurance bonds. Both ISAs and bonds don’t appear on tax returns.
    7. Before considering anything at all you need to ensure you are debt free when you get to retirement and in the meanwhile you also need to ensure that your family would be looked after if you die before retirement – so consider life assurance.

  2. Christopher Petrie 9th March 2018 at 8:18 pm

    I simply cannot understand why Mr Katz so hates working people having the benefit of an employer adding payments to an employees long term savings plan.

    Isn’t this what IFAs spent years trying to get companies to do for their staff?

    So what’s wrong now that all employers do it? AE is one of the few pieces of government legislation that demonstrably helps the people it was meant to.

    People building up pension benefits for the first tine in their lives is something to be celebrated, not sneered at by a retired IFA who benefits from his own private pension.

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