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Minimum Wage Earners

Volume 456: debated on Tuesday 6 February 2007

To ask the Secretary of State for Work and Pensions what assessment he has made of the potential impact on the finances of those on the minimum wage of the requirement to take out a personal pension plan or savings scheme. (117276)

Whether or not to save for a pension remains a matter for individuals to decide, and needs to be based on their personal circumstances and lifestyle, including those people on national minimum wages. The May 2006 White Paper, “Security in retirement towards a new pension system” indicates that around 2 per cent. of employees in the group eligible for automatic enrolment are estimated to be on the national minimum wage.

The Government are keen to see pension saving increase, particularly among people on moderate to low incomes. That is why we will be introducing a new, simple, low cost pension savings vehicle, where the eligible savings of hard working people who want to save will be enhanced by contributions from their employers and normal tax relief.