The arguments for and againstcompulsion

There is a £27bn funding gap in UK pension provision and compulsory contributions may be the only way to close it, especially given the success of such moves in Australia and Sweden

Experience from around the world demonstrates that the introduction of mandatory pension contributions gives a considerable boost to the private pensions market and can particularly stimulate the growth of defined contribution (DC) funds. This has the beneficial effect of reducing dependency on over-burdened pay-as-you-go state schemes and defined benefit (DB) occupational plans. Despite success with compulsion in Australia, the Netherlands, Sweden and Switzerland, opinion in the UK remains fiercely divided. Datamonitor, the independent market analyst, says the Government must introduce c...