‘Consensus’ on personal accounts

The government hopes its proposed system of personal accounts will encourage people to save towards their retirement.

According to minister for pensions reform James Purnell, there is a “broad consensus” on a package of reforms to the pensions system.

Changes to be instigated include linking the state pension to earnings and introducing automatic enrolment into a workplace pension.

Describing these changes as the “main building blocks of the government’s pension reforms”, the minister said the age of pension eligibility is also to be raised.

“The debate has moved on considerably in the last year – there is now broad consensus around these proposed changes, ” said Mr Purnell.

Under the personal account scheme, employees would be automatically have a retirement fund account opened for tem.

They would make contributions of 4 per cent, with the employer making a minimum three per cent contribution and the government providing one per cent tax relief.

A recent report from AXA insurance revealed that Britons start planning for their retirement earlier than any other nation in the world.

© Adfero Ltd

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