Pension News NPSS 'could Leave Current Savers Worse Off' 17846062

NPSS ‘could leave current savers worse off’

25 October 2006
According to the National Association of Pension Funds (NAPF), the new National Pensions Saving Scheme (NPSS) could leave those currently enrolled on their company’s retirement fund payroll worse off in the long term.

David Robbins, the research and policy manager at NAPF, said that the NPSS would benefit many people who are currently relying on their state contributions for their twilight years.

However, he also cautioned that because the NPSS will mean more people signing onto company schemes, this may also see employer contributions diminishing.

“Those who are saving in company schemes may find themselves worse off because…if automatic enrolment increases take-up from, say, 50 per cent to 80 or 90 per cent, the employer may decide on a lower contribution rate in order to compensate,” Mr Robbins observed.

It was key to the success of the NPSS as a way of avoiding the impending ‘pensions time-bomb’ that it was advertised clearly as a “minimum level of provision”, Mr Robbins added, rather than “adequate”.

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Written by Editorial Team