Are you about to be forced into a company pension by your employer?

By JO THORNHILL
Created: 09:44 EST, 29 May 2011

Half of workers do not know they could soon be automatically enrolled into a Government-run pension scheme if they are not in a works pension already.

Pension future: Nest chief executive Tim Jones is gearing up for a busy year

From October next year, employers who do not already offer a company pension to staff will have to offer the Government's new savings scheme, known as Nest (National Employment Savings Trust).

Unless workers ask to opt out, and provided they are over the age of 22 and earning at least £7,475, they will have money deducted from their salary each month to go into Nest.

entitled to pay annual limits. initially set at It means someone and eligible will see £56 monthly pay.

Employees will have to pay a minimum of one per cent of salary, which will be matched by a further one per cent from employers.

Basic rate tax relief at 20 per cent is then added by Government.

Combined contribution levels will then rise gradually to a minimum of 8% from 2017, of which the employer must pay at least 3%.

Workers will be entitled to pay more, subject to annual limits. This has been initially set at £4,200 a year.

It means that from next year, someone earning £22,000 a year, and eligible to save via Nest, will see £56 deducted from their monthly pay.

'Nest is clearly going to take a few people by surprise,' says Ian Martin, director at HSBC, which carried out the research as part of its The Future of Retirement report.

'But Government will soon be increasing the information available for workers and the process will be phased in slowly.

'Workers should arm themselves with information now and take advice.'

Nest, whose chief executive is Tim Jones, will provide savers with a range of investment options designed to take into account their intended retirement age. The proceeds will be used to buy a pension annuity at retirement.

To find out more, go to the Government's dedicated website at nestpensions.org.uk.