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Virgin wants Govt to restore opt-out rule on pensions

Workers in small companies would be almost £3bn better off if the Government reintroduced the opt-out rule on workplace pensions, according to Virgin Money.

It found that up to 2.4 million employees could be missing out on pension contributions because they have not chosen to join a company scheme.

In response to the Pensions Green Paper, Virgin is calling on the Government to reinstate the rules, abolished in 1988, which forced employers to include staff in a pension scheme automatically unless an employee opts out. It estimates this could put an extra £2.8bn in workers&#39 pension schemes.

Its figures show more than nine million people work for SMEs with up to 249 employees. Yet, where the company runs a pension, only 46 per cent of workers choose to opt in compared with 80 per cent of those working for big companies.

Director Gordon Maw says: “We now face a pension crisis partly because we have placed too much emphasis on voluntarism in the past. We believe that it would not take much to close the so-called savings gap and concepts like a workplace opt-out could provide the stepping stone needed to make a real difference almost straight away. Our research reveals that SMEs could lead the way in working to improve the pension plight for thousands.”

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