The good news is people in the UK are living longer than ever before; the bad news for government is that the state finances will have to bear the burden. Many people are overly complacent about putting pension provisions in place whereas others simply can’t afford it. Low to middle earners will often understandably prioritise the here and now and put thoughts of tomorrow on the back burner. For this reason, the government is introducing an automatic pension enrolment scheme which will begin its initial rollout on the 1st of October this year.

Automatic pension enrolment pushes the question of whether to join a scheme to the forefront of many UK workers’ minds. Actively opting out of the scheme will be a bold decision that many workers won’t take and so some forecasts have projected that up to 10 million new pension schemes will be put into place in coming years. If you’re over 22, earning more than £8,105 per year and work or ordinarily work in the UK you will be eligible.

The scheme will initially demand that 2% of your earnings are put into your pension pot, rising to 5% in 2017 and 8% in 2018. Employers will have to contribute a minimum of 1% in 2012, 2% in 2017 and 3% in 2018. Any employers who don’t have pension schemes in place can forward workers to the NEST government enabled not-for-profit organisation’s scheme.

The auto enrolment scheme is a potentially huge government initiative with many questioning whether a state pension will even exist in years to come. This could be the first phase of phasing the state out of the lives of older people. There will be a huge advertising campaign beginning in September to make people aware of the schemes introduction and the debate could become a political hot potato.

Whatever your thoughts may be on the schemes feasibility, any provision is better than none, and similar schemes have worked well in places like Canada who thought on similar lines as early as 1966.