PENSION SEMINAR: Why the attempt to eliminate poverty has been hit and miss

Jill Turner from Jill Turner Associates.
Jill Turner from Jill Turner Associates.
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The history of pensions is the history of government attempting to eliminate poverty in old age – but it’s been hit and miss, according to Jill Turner, of Jill Turner Associates.

The National Insurance Act of 1946, which established a state contributory pension, was followed in the 1970s by a state earnings-related pension. But the stakeholder pension of 2001 was a “wasted opportunity” because it was not compulsory, Jill said.

She added: “People were still not saving for their retirement so in 2012, the government introduced compulsion in the form or auto-enrolment. Plenty of employers say they are not running a social service – but some see it as a great opportunity to offer benefits to employees.”

Get ready for auto enrolment nine to 12 months before your ‘staging date’ – deadline for it to go live – and assess the workforce, she said.

“It applies to those aged 16 to 74. They don’t have to do anything and can opt out. Those on less than £10,000 aren’t automatically included but can ask to join. Below £5,000, workers can join, but employers don’t have to make contributions for them.

“It applies for full-time, part-time, temporary, permanent and zero-hours workers and even directors. If you need to set up a new scheme, NEST has a lot of government support, it’s the default option. It’s a good mass option.

“Auto enrolment is simple, it’s the other stuff that takes time.”