The financial services provider MetLife Europe has called for the launch of a ‘mini-pension’ account to supplement the introduction of auto-enrolment in the UK in October 2012.
The firm believes such an account would further incentivise saving for retirement, with the ability to contribute £5,000 per year, tax relief of 40% and access to up to 25% of the fund every five years.
Peter Carter, product marketing director at MetLife UK, said: ”It is aimed at engaging individuals to plan actively for their retirement and to save more than the minimum. Auto-enrolment will galvanise retirement saving but the minimum eventual contributions of up to 8% will not be sufficient to meet retirement income expectations.”
MetLife has suggested that the proposal could be funded by reducing current annual allowances of £50,000 and limiting relief for existing top-rate taxpayers.
The firm’s full proposals for pension reforms are due to be released in September.
Auto-enrolment will see all eligible workers in the UK automatically being enrolled in qualifying pension schemes, with many currently failing to enter these and subsequently missing out on their benefits.
©2011 funds europe
