THE DEPARTMENT for Work and Pensions proposals to shrink the £27bn savings gap with the introduction of compulsory pensions received a lukewarm response from the industry yesterday, writes the Scotsman .
Latest consultation from the DWP suggests employees should be automatically enrolled into their company pension scheme unless they specifically opt out.
However, some analysts believe the proposals were badly sketched as well as unsuitable for millions of low earners, and potentially expensive for small businesses.
June Grant, head pensions adviser at Aon Consulting’s Edinburgh office, said: "The government has previously said ‘no’ to compulsion, but if it’s looking at a default employee stakeholder contribution, presumably where there is no company scheme, then we will have compulsion."
Moreover, some experts also deem the proposals to increase contributions with age could put employers in breach of new EU-imposed age discrimination laws set to take effect in 2006.
That said, the government also received support by the CBI and by Ron Sandler.
STAYING IN the political arena, the prime minister Tony Blair yesterday defended Gordon Brown’s spending plans, saying there would be no need to slash spending or increase taxes.
The Daily Telegraph says Blair told the Commons liaison committee that he did not believe Brown would break the promise he made last year to only borrow to invest in the course of an economic cycle.
Blair said: "It is true that the borrowing figures have been adjusted because of the downturn, but actually I think the golden rule will be met. That is the prediction the Treasury are making and I think it is shared by a significant number at least of the commentators.
"If we look at it in real terms, our deficit is easily manageable, and is actually better than at most other points in downturns of the past," he added.
LUCKILY FOR the prime minister, everything does not seem to be gloom and doom as the UK’s biggest mortgage lender said the property market has accelerated into 2004, with prices making their highest leap in 15 months.
According to the Times , latest figures by Halifax suggest prices have been growing by 2.2% since the beginning of the year as the lack of properties for sale prompted buyers to bid up.
The price rise was the highest since October 2002, the bank said, bringing the price paid by first-time buyers over the £100,000 mark for the first time.IFAonline
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