2. A BASIC FRAMEWORK FOR RETIREMENT PENSIONS

[ch 2: page 12]

The new basic framework for retirement pensions in the UK is taking shape. Auto-enrolment into workplace pensions is bedding in at larger workplaces, and extending out to take in smaller and smaller workplaces. Joining this framework will be the introduction of a new single-tier State Pension, which is ready to be applied from April 2016.

However, these developments threaten to leave many retiring workers with a pension income falling far short of their pre-retirement earnings, and trade unions will have a central role in pushing for better quality workplace pensions.

Summary of changes affecting the basic pensions framework:

• introduction of the single tier State Pension and transitional pensions from April 2016;

• an accelerated increase in the State Pension Age;

• relaxation of tax rules on withdrawals from Defined Contribution pensions, starting March 2014;

• raising of the earnings trigger for auto-enrolment in line with the income tax threshold;

• power to exclude certain groups (as yet unspecified) from auto-enrolment;

• new definition of Defined Benefit pension schemes for auto-enrolment (see page 32);

• new definitions of Defined Ambition, Defined Contribution, Defined Benefit pensions (see page 44).