Auto-enrolment legislation officially comes into effect today.
From 1 October, every employer in the UK has a legal duty to automatically enrol eligible employees into a qualifying workplace pension scheme and make contributions towards it.
The duties will be staged in over six years, starting with the largest employers. Organisations such as Asda, Informa, Kentucky Fried Chicken and Telefonica have already got their plans in place to comply with the changes.
According to the Department for Work and Pensions (DWP), around 600,000 more people in the UK will be saving into a workplace pension and, by May 2014, about 4.3 million people will be saving for retirement.
Steve Webb, minister for pensions, said: “We are proud to be introducing this truly historic change, which will radically alter the way we save for our old age, and see millions more people putting something aside for the future.
“From October, we will start seeing large firms, such as banks and big supermarkets, automatically enrolling their staff into a workplace pension. Between now and 2018, more and more employers will come on stream, right down to the smallest ones.
“If we can get between six and nine million more people saving in a pension by the time all employers are in, that’s a genuine savings revolution.”
John Cridland, director-general at the Confederation of British Industry (CBI), added: “1 October marks a new dawn for pension saving, with many millions of employees being given the opportunity to save towards a pension and benefit from an additional contribution from their employer.
“The business community is committed to helping employees to achieve a good income in retirement. Auto-enrolment will encourage them to think long-term about their finances to achieve this goal.”