Though even a casual reader of the British press would recently have heard a lot about pensions, regarding what some see as the excessive benefits awarded to medical professionals, what you might be less aware of is that very soon+ the British pension system as a whole is to undergo some pretty major changes to its structure. These changes will come into effect in October of this year, and you may be interested to know what exactly differentiates the old system from the new one.
Essentially this is about ensuring that the greatest numbers of people are enrolled in some kind of pension. Crucially by enacting legislation stating that people earning over a set amount (£8,105 per year, which includes pretty much all of us) would be automatically enrolled in some kind of contribution-based pension scheme. The prime difference between this and the previous ‘stakeholder’ system is that in the stakeholder system no pension-scheme was automatically triggered, but was instead simply made available. Although you will be enrolled in a new pension scheme automatically you can, whether or not you have alternative pension arrangements – such as a scheme set up at an independent provider like nowpensions.com, opt out. The threshold that counts you as ‘included’ has also been lowered highlighting the focus on ensuring that as many people as possible automatically have some pension provision made for their future.
You may feel however, that you are the best person to handle where your money goes and how it is invested, and therefore perhaps it would be more suitable for you to get a pension of your own choosing – from a provider like Now Pensions – to ensure that when it comes to providing for your future you are the one who has the final say. Either way from October 2012 the government will automatically be giving you a helping hand.Payment was received for publishing this guest post.