The new scheme will mean all UK businesses will be required to offer a company pension scheme to all staff aged over 22 and earning above £7,475 per annum.
With intentions to benefit those who have no retirement fund-currently between four and eight million people-the National Employment Savings Trust (NEST) will mean even those who often change jobs will have build up a pension for their retirement.
The scheme will begin next year and the government hopes all companies will be registered by 2016.
Pensions Minister Steve Webb said the move would help many UK employees who currently have no retirement fund to look forward to: “NEST will be the new low-cost pension scheme that will be the vehicle for saving for millions”.
Small businesses have reacted badly to the news, claiming the cost would not be enough for their books to handle. After the government announcement that the private sector would need to pick up where the public spending cuts left off, the new scheme would mean more financial hardships for ‘micro’ firms.