Personal Accounts
The Government published its white paper, ‘Personal Accounts: a new way to save' on 12 December 2006.
This white paper set out the Government's proposals to encourage and enable greater private pension savings. One of the measures proposed is to include a duty on employers to automatically enrol all eligible workers between the ages of 22 and state pension age into a ‘good quality work place pension scheme'.
The default option will be a scheme administered by the Government themselves, known as a Personal Account. Employees will contribute a minimum of 4%, matched by a minimum 3% employer contribution and 1% in the form of tax relief from the State.
The concern for the pension industry is that for certain employees the contributions could be a waste of money as the benefits from these contributions will not exceed the means tested benefits currently available from the State.
Companies like Mantle & Partners therefore believe it is imperative that companies and their employees obtain advice as to the appropriateness of the contributions. We have also seen a large number of employers wishing to implement their own pension scheme instead of being forced to adopt the Government's Personal Accounts. This simply involves paying contributions to a selected scheme with the assistance of advice from Mantle & Partners, rather than paying into the Government's scheme.
If you would like to discuss the effect of Personal Accounts on your company, please contact Clive Shaw at Mantle & Partners on 020 8394 0954 (clives@mantleifa.com).