Government set to roll out workplace pension scheme to include 18-year-olds
1 min read
The workplace pension scheme will be extended to include 18-year-olds unless they choose to opt out, David Gauke has announced.
Under new proposals, all workers over 18 and earning more than £10,000 a year will qualify for auto-enrolment. The scheme currently applies to staff aged 22 and above.
The plans will come into force in the mid-2020s and will bring an extra 900,000 people into the scheme.
Pensions Secretary Mr Gauke said: "For an entire generation of people, workplace pension saving is the new normal.
“My mission now is to make sure the next generation of younger workers have the same opportunities.”
The workplace pension scheme was introduced in 2012 with the intention of increasing private pension provision, particularly among young people.
The extra costs falls on employers, with the plans projected to costs proposals will cost them an extra £1.4bn a year.
National chairman at the Federation of Small Businesses, Mike Cherry, said: "Requiring employers to contribute from the first pound of earnings, will mean that, by 2019, hundreds of thousands of small employers will have to pay up to £180 more per employee each year."
"For employers in certain sectors, such as care and hospitality, where margins are tight this will really add up."
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