You may have heard that the government is trying to encourage all of us to take more responsibility for our income in retirement.

In 2012 the UK Government will introduce a new pension scheme to the UK. Previously known as Personal Accounts, pensions minister Angela Eagle announced the new brand – The National Employment Savings Trust – NEST on 7th January 2010.

The initiative is part of an overall general pensions reform strategy and will create a significant change in the way people save for their pensions and retirement in the UK. For the first time both employees and employers will be forced to contribute to a NEST pension (formerly known as a personal account pension) on behalf of the employee, unless they choose to opt out or unless they already contribute to an alternative qualifying workplace pension.

Under the new system, employers will need to enrol all employees automatically into a NEST pension scheme unless they already offer a suitable alternate "qualifying" pension. Importantly employees will be compelled to contribute 4% of band earnings (between around £5000 and £33,000) and employers will have to contribute 3%. A further 1% will be paid in the form of tax relief meaning that a total contribution of 8% of band earnings will need to be paid into a NEST pension scheme, or an alternative, from 2012.

For Individuals

• Take control of your pension by establishing a plan to suit you and most importantly make sure that the investment strategy suits you – this will be determined by your attitude to risk and the time to your intended retirement date.
• Obtain a contribution from your employer they may be obliged to do something in 2012.
• Review and consolidate (if appropriate) any old or existing scheme/plan that you have.

For Businesses

• Review your position with employee packages and consider how NEST may affect you
• Consider setting up a company group scheme
• Consider offering contributions to your employees’ own plans

Whatever your position, Talk to the Mark Gregory team about the best options for you.