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National Pensions Framework PDF Print E-mail

The National Pensions Framework does not have any immediate effect on pension legislation.  It sets out the Governments intentions for changes in the pensions system over the coming 4 or 5 years.  They have said they will keep in mind the impact of changes on competitiveness and will only introduce changes when they are confident the time is right. 

To follow are the main points of interest;

- Retirement age will increase from 65 to 66 in 2014,  to 67 in 2021 and to 68 in 2025.

- Employers must operate a pension scheme for all employees.

- Employees will be automatically enrolled into the new pension scheme unless they are members of a defined benefit scheme or a defined contribution occupational pension scheme with a contribution rates equal to or greater than the minimum paid under the new scheme.

- The total contribution for this scheme will be 8%, with 4% paid by the employee, 2% paid by the state in the form of tax relief and 2% paid by the employer.

- Tax relief at 33% will replace the current system of marginal tax relief for pension contribution at the standard and higher rates of 20% and 41%.