Pension reforms to boost employee benefits

Government plans to initiate a massive overhaul of pensions could have a positive effect on employee benefits and help those struggling to save towards retirement.

The coalition is proposing introducing a system where employers have to register their members of staff for what will now be called National Employment Savings Trusts (Nest).

Elaine Gibson, senior policy advisor at the Institute of Payroll Professionals, said the plans were very positive for employees.

She said: "Under what is being planned at the moment, employers will have to contribute up to three per cent of certain capped earnings. Employers have to automatically enrol all their employees."

Ms Gibson added that the proposed reforms could cause problems for small businesses, or even create a situation where a nanny looking after a family would have to be provided with a pension.

Figures released by Aon Consulting last week suggested around 35 per cent of the UK population had no pension provision and that tax breaks were not a key motivator for savers.
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