Pensions  

Auto-escalation may be needed for pensions: Webb

Speaking at the launch of the Scottish Widows retirement report, held at the Royal Institute of Chartered Surveyors, the pensions minister suggested the industry should adopt auto-escalation, to strike the right balance between getting people to save more, without taking so much out at source that employees opt out.

He said that, from 8 per cent, the current contribution rate, which employees at large firms are starting to pay, the rate should rise in small increments.

A question from the floor posed whether this should be set at 10 per cent, 12 per cent or even 15 per cent, but Mr Webb said the challenge was not to “frighten people off” saving altogether.

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Mr Webb also spoke about the new proposed collective defined contribution schemes, pledging that he was going to “try to make it work”.

To this extent, he said he would be going on a tour of other countries that have already adopted a CDC model, adding: “Take Denmark, which has a tenth of the population of the UK - if Denmark can make it work, then we can”.

However, he did add: “Implementing this will not be an issue for me - but for the next pension minister”.