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600,000 people to be signed up to new pension scheme by the end of 2012

 

Some 600,000 more people will be saving into a workplace pension scheme by the end of the year, according to official estimates.

 

With the first pension auto-enrolments taking place in October, the Department of Work and Pensions (DWP) has published further details of the numbers of people likely to be signed up during the initial staging dates.

 

It estimates that 380,000 workers will be enrolled next month, while a total of 420,000 people are expected to be enrolled by the end of November. Around 600,000 workers will have been signed up by the end of the year, according to the DWP.

 

Commenting, Iain Duncan Smith, Secretary of State for Work and Pensions, said: ‘Automatic enrolment will get up to nine million more people saving into a workplace pension and for many it will be the first time they have had the opportunity to save.

 

‘It will allow people to start planning for their retirement and this will make it easier for them to start putting something aside, along with a contribution from their employer.’

 

Under the auto-enrolment regulations, employers that do not already offer an appropriate pension scheme will be required to enrol all eligible employees into a qualifying scheme and pay a minimum contribution into the fund, unless an employee chooses to opt out.

 

Employees will also contribute to their pension scheme – this will start at 1% of their salary, before eventually rising to 4%.

 

The scheme is being phased in from October 2012, starting with larger firms. Smaller businesses will be required to comply by 2018.

 

The Government also intends to extend the FirstBuy scheme to help some 16,500 first-time buyers get onto the property ladder. Under this, would-be homeowners without a deposit could receive an equity loan of up to 20% of the purchase price.

 

Launching the shake-up, the Prime Minister and Deputy Prime Minister said: ‘This Government means business in delivering plans to help people, build new homes and kick-start the economy. We're determined to cut through the bureaucracy that holds us back.

 

‘That starts with getting the planners off our backs. Getting behind the businesses that have the ambition to expand. And meeting the aspirations of families that want to buy or improve a home.’

 

The Government hopes the new measures, which are likely to be in place until 2015, will help to rebuild the UK economy.