The white paper states unequivocally that government has a responsibility to protect its citizens against poverty and insecurity and that millions of people are not doing enough to meet their expectations for income when they retire.

Following Turner, the central plank of the white paper is the proposed establishment of a National Pension Savings Scheme (NPSS), which would involve:

  • personal accounts
  • compulsory enrolment for employees (auto-enrolment) at the age of 22, with the right to opt-out;
  • minimum employee contributions of 4% of earnings within a particular band (i.e. between a primary threshold and the upper earnings limit), with the right to pay additional contributions;
  • employer compulsion (i.e. compulsory employer contributions) of 3% of an employ­ee’s band earnings unless the employee has opted out;
  • a further contribution of 1% of band earnings, to be provided by tax relief or a similar system;
  • the opportunity to invest in a range of professionally managed funds;
  • annual management charge not exceeding 0.3%;
  • the right of an employer to nominate an alternative arrangement if the combined contribution rate to it would be at least 8% of band earnings, and the employer’s contribution rate at least matches the minimum NPSS requirement;
  • the opportunity for self-employed people also to participate.