Magazine article Public Finance

Low-Paid Set to Benefit from Pension Savings Scheme

Magazine article Public Finance

Low-Paid Set to Benefit from Pension Savings Scheme

Article excerpt

Low earners and carers could receive around two-and-a-half times their savings contributions under the proposed National Pension Savings Scheme, according to research by the Pensions Policy Institute.

Initial fears were that the scheme would benefit mostly middle-income earners when it is introduced in 2012.

The PPI study, Are personal accounts suitable for all?, published 5 on November 30, considers the interaction between the proposed system of personal accounts (the NPSS), state pensions, the tax system and means-tested benefits to identify groups for whom the state-led savings scheme is suitable.

PPI director Niki Cleal said: 'The analysis shows that today's young people are likely to get good rates of return if they contribute to their personal account throughout their working lives.'

These include many low-income earners, whom the government wants to raise into financial security during their retirement. …

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