The Spending Review reveals plan to make pension saving compulsory.
The Spending Review by Chancellor George Osborne confirmed that funding will be available for the launch of the National Employment Savings Trust (NEST).
The review commented that "the DWP settlement includes funding for the introduction of auto-enrolment from 2012 and the establishment of NEST".
Further details will follow but it is clear the Government supports the plan to make pension saving compulsory.
The National Association of Pension Funds (NAPF) and the Investment Management Association, whose members stand to benefit from auto-enrolment reform, welcomed the announcement.
From 2012, workers whose employers do not offer a pension fund will join NEST, while companies that already sponsor a pension fund will have to include all new recruits. NEST will take voluntary contributions from 2011.
Tim Jones, NEST's chief executive, said it "is now really taking shape and will be ready to launch in low volumes in 2011".
Workers over 22 earning more than £5,000 are eligible but will be able to opt out of NEST or their corporate pension.
Enrolment and contributions will be phased in between 2012 and 2016, starting with large companies. By 2017 the minimum contribution to NEST will be 8%, including employers' and workers' contributions.
We will look at the introduction of NEST in our next Employee benefits review newsletter.
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