Personal Accounts: Summary to Date for the Personal Account

It is no secret that the UK is facing a pensions crisis. This fact has been recognised for many years now but recent estimates suggest that between 9.6 million and 12 million individuals have inadequate pension provision, or none at all. 

Stakeholder pensions were introduced in 2001 in an attempt to make it easier for people to commence and contribute towards their own pension. Whilst their introduction did force the insurance industry to introduce lower cost, more transparant pension products they failed to address the main issue:- the fact that people are reluctant to voluntarily contribute towards their own pension arrangements.

Personal Accounts [personal account pensions] are being introduced in 2012 to provide a "new way to save". They will effectively be individual pensions run on an occupational basis to strict [new] government guidelines

Pivotal will be a compulsion on individuals and employers to contribute to a "personal account" scheme, or a recognised  alternate employer sponsored pension scheme.

Employers will have to automatically enrol all eligible employees to the scheme and then facilitate contributions from both employer and employee. Employees will be able to opt out of the scheme and effectively not contribute, but if they do so, they will need to be reintroduced to the scheme every three years by their employer.

The increased financial commitment and administration role for companies may prove onerous and exhaustive and employers will want to know their options to reduce this burden or confirm that their existing pension arrangements make them exempt, see options for employers for further information.

Although the exact shape of personal accounts, and the regulations they will be run under are still to be finalised, the personal accounts key facts are not in dispute and they are summarised via the other menu options on the left. The Personal Accounts Delivery Authority has been established to oversee their introduction however the insurance industry, political parties and employers are all trying to have their say on the specifics.

This site demonstrates the large amount of information that is already available and will report on further developments as they happen in the run up to the 2012 deadline. If you would like to receive our email update please complete the form on the right.