Are you prepared for 2012?

01st June 2011

A guest blog entry from Nigel Taylor of Seddon Smith Financial Services


As you are no doubt aware, 2012 is the year when the Olympics come to London, bringing with them a potential boost for the UK. However, rather less well known is that this also sees the introduction of NEST, a pensions scheme designed to change employees’ access to workplace pension and retirement arrangements – and which will increase costs for many businesses.

A recent study of 300 businesses by BBS consultants & Actuaries shows that employers are unprepared for the new legislation with 87 per cent of respondents reporting they had yet to agree their policies on dealing with the measures

Considering the changes

NEST – the National Employment Savings Trust – is designed specifically to encourage lower earners to start making provision towards their own retirement. The scheme will use a combination of compulsion and incentive to maximise participation and thereby offer a savings solution for many workers who have so far made no independent arrangements of their own.

The compulsion will come by making enrolment automatic whilst the incentive comes through enforced employer contributions and tax relief, which will double the amount the employee, invests. An employee has to actively opt out – every year – if they do not want to be involved.

Employers like yourself are therefore now faced with a number of decisions: -

  • What are the costs and how will you fund them?
  • In addition, what more flexible arrangements can you offer to retain higher earners or incentivise more valuable employees?
  • Alternatively, does your existing scheme meets the new criteria and therefore be allowed to continue in place of the Government’s plan?

To take action now and learn more, we have prepared a small document to give you the facts. To receive this free, please email:

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