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Pensions crisis set to cost pounds 10bn.

LEVELLING down generous pensions schemes could cost employees pounds 10 billion a year in savings, a report warned today.

The National Association of Pension Funds called on the Government to make sure that Personal Accounts - the low-cost pension scheme due to come into force from 2012 - are designed to "complement rather than replace" existing pension provision.

Under Personal Accounts all employees will be auto-enrolled into a savings vehicle in which they contribute four per cent of earnings.

This will be matched by three per cent contributions by employers and one per cent in tax relief.

Despite being welcomed as a way of getting people to save for their retirement. Personal Accounts have also prompted concern that companies with more generous retirement schemes will level down their contributions to the three per cent minimum.
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Publication:Birmingham Mail (England)
Date:Dec 8, 2006
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