9 September 2013

Opting Out of Free Money

The Department for Work and Pensions have done a review on the early stages of Auto-Enrolment - that's the pension regime which all employers are required to adhere to over the next few years.

Employees have to be signed up to a pension scheme with employer contributions - although they can choose to opt out if they insist. Although employees do also have to make their own contributions (unless they have a very generous employer) the fact that the employer is making contributions effectively gives them free money which they may not have had before.

The DWP review says that 9% of large company employees have opted out - and that's seen to be better than expected.

Unless you have some fairly specific circumstances (like you can't afford your own contributions) then it seems to me that opting out means opting out of free money. And why would you do that?!

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