A payroll expert has said that the new National Employment Savings Trust (NEST), proposed by the coalition government, is a good thing for employees.
Elaine Gibson, senior policy adviser of the Institute of Policy Professionals – which was established as an industry body 30 years ago – suggested that the new Conservative-Liberal Democrat administration would have been looking for a scheme "that was as low-cost as possible".
She indicated this is because any extra charge may have been passed on to employers, but under this proposal companies will have to contribute up to three per cent of capped earnings into an individual’s trust.
The expert said the measure is "absolutely brilliant for employees" as it prepares many people for the future and encourages more saving for retirement.
However, she pointed out that this may be a problem for micro-employers, organisations that employ perhaps just one or two people, as this could be something of a shock and they are being told to start planning.
By Colette Paxton