Standard Life: New pensions act may mean employers pay more

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Standard Life: New pensions act may mean employers pay more

Thu 27th Nov 2008

Standard Life has said that the new Pensions Act 2008 could mean employers pay more towards their employees' pensions.

The new act introduces a system whereby employees are automatically enrolled on a pension scheme unless they opt out, instead of it being an optional extra like it is now.

Standard Life claims that this is likely to cause the numbers of people using employer pension plans to increase from 56 per cent to 80 per cent and will force employers who currently have no pension schemes to set them up.

Andrew Tully, senior pensions policy manager at Standard Life, said: "This act brings massive new responsibilities for employers.

"It introduces compulsory pension provision by employers from 2012 which will see employer costs increase significantly."

Yesterday, Standard Life said that the increase in National Insurance announced in Monday's pre-Budget report, may also see employer pension contributions rise as people take salary cuts to avoid paying the increased amount.

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