Labour's 1997 General Election manifesto stated: "Too many people in work, particularly those on low and modest incomes and with changing patterns of employment, cannot join good-value second pension schemes. Labour will create a new framework to meet this need."
We are still waiting for this new framework to be created - and it has recently emerged that the planned Personal Accounts will not be fully implemented until 2016, four years later than originally envisaged.
Eligible employees for Personal Accounts are aged 22 to state pension age and working full or part time. All workers will have to be put into the scheme, in which 4 per cent of their salary is taken away to be invested in their pension, with the employer having to put in a further 3 per cent of salary.
However, the Department for Work and Pensions has recently announced that employers will have to contribute only 1 per cent in 2012 and increase their contribution to 2 per cent three years later; the full 3 per cent isn't due until 2016.
At the moment, employers contributing to a pension scheme for their workers are putting in, on average, over 7 per cent of salary. Under the Personal Accounts scheme, employers will only have to put in 3 per cent of 'band earnings' (between around £5,000 and £33,500 a year).
The Personal Accounts investment consultation closed on 10 September 2009.
