Pension contributions 'set to rise' under new regulations
The government plan to raise the minimum wage for 18 to 21-year olds could see employers having to contribute more to personal accounts, it has been warned.
In March, Labour pledged to raise the wage from £4.60 to £4.77 for those aged between 18 and 21, while 16 to 17 year olds will receive an hourly rate of £3.53.
According to advice from consultants Watson Wyatt, if the changes are implemented in October those who opened a personal account under the previous wage could be entitled to £1.10 more per week in employer contributions.
However, the popularity of pension schemes within the age bracket has been called into question.
Principal of Surrey-based IFA Christie Scott's Julie Hedge said: "There is not enough education around and it is possible that by their early 20s some young people may be paying off debts in which case disposable income may be king."
In other news, the government abandoned a plan to top up the wages of service industry workers with non-cash tips.