Pictured above: Kevin Jenkins, Independent Financial Adviser, Key Financial Management

The government has announced that National Employment Savings Trust (NEST) will be the new name for personal accounts, which is the compulsory workplace pension scheme due for national launch in 2012.

Kevin Jenkins from Lichfield based IFA firm, Key Financial Management explained: "There is a massive short fall in the amount of money that workers are contributing towards their retirement with fewer than half contributing to a company pension. NEST is the government's strategy to reduce and eliminate this shortage by placing the responsibility with the employer to ensure that its workers have the opportunity to save for their retirement." Key Financial Management is a trading name of 2plan Ltd.

NEST is going to be introduced from 2012 on a rolling programme of auto enrolment commencing with large employers initially. The staged introduction will see just about every employee in the country be signed up to a pension by 2017. The minimum default contribution rate will be 4% of earnings (on those earnings between around £5,000 and £33,000) from the employee, 3% from the employer and 1% from the government.  

Jenkins concluded: "All employers will have to contribute to NEST, and employees will be enrolled automatically, however employees will have the option to opt-out.

"I would recommend for companies to consult their independent financial adviser who will be able to provide further information on the roll-out schedule and what preparations should be done now".

Kevin Jenkins has recently performed a number of seminars on NEST and will be running future seminars throughout the year. For further information please contact Kevin on 0845 430 1475 or email kevin@keyfinancialmanagement.com.