More beef for the pension plan
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.A compulsory personal pension plan for all staff unable to join a company pension scheme and self- employed people is being urged on the Government by occupational pension fund providers.
They argue that such a scheme would help both to prevent further personal pension mis-selling scandals and to ensure that everyone is provided for in retirement.
The plans, announced this week by the National Association of Pension Funds representing 7 million people in employee schemes, would involve companies and staff each paying contributions of 5 per cent of an individual's salary into a pension plan. The self-employed would pay 10 per cent.
The plan's aim would be to pay a pension income of about 50 per cent of a person's income at retirement, although this would not be guaranteed.
Five-yearly reviews of the fund's position would be carried out to determine whether on the basis of its performance contributions should be increased or lowered. People over the age of 50 would have reviews carried out at least every two or three years.
At the same time, this would allow the Government to wind up its State Earnings Related Pension Scheme (Serp), which is already set to pay diminishing benefits to millions of people who pay contributions.
Peter Murray, Unilever pensions manager and one of the authors of the NAPF plan, said at the association's annual conference in Birmingham this week that such a scheme would be of particular help to the low-paid. "It is becoming clear that the state is unable to meet the bill for people in retirement," Mr Murray said.
"What we need to do is to promote the idea of compulsory saving for individuals. This way, those in particular need could be targeted for help, while everyone else would be encouraged to provide for themselves."
The NAPF's proposals involve funds being managed by private companies.
Fund managers wanting to grab a slice of the business would have to guarantee low charges. The NAPF believes this would prevent complaints by many individuals who have seen charges set by insurance companies for existing personal pensions grab up to a third of contributions.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments