Improving Pensions

Work and Pensions Secretary Amber Rudd has announced an innovative new pensions scheme to deliver improved returns for millions of savers.

Key facts:

The Conservative government's radical reforms in saving for retirement could see incomes rise by 7 per cent a year. The plans are backed by the Communications and Workers Union after they were successfully used by Royal Mail.
With the new schemes, known as Collective Defined Contribution (CDC) schemes, members get more certainty in their retirement, with regular pay-outs. And unlike traditional final salary pension schemes, those pay-outs aren’t affected if your employer goes under.

CDC pension schemes offer a regular retirement income by allowing group contributions to be pooled together and invested to give members of the scheme a higher final benefit level.

The new schemes are expected to appeal to companies who want to offer strong pensions provisions to employees without having to hang on to enormous pension liabilities.

Why this matters: 

If you’ve worked hard all your life, you deserve to have a retirement you can look forward to with confidence. With our radical reforms, we’re determined to make the UK the best country in the world to grow old.

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