Money purchase schemes - 'the next pensions'

Doctors may be interested to hear that money purchase schemes will replace pension provisions in the future, according to a pensions expert.

Des Hamilton, of the Pensions Advisory Service, made his comments in reference to a reluctance of employers to install final salary pension schemes.

"It quite clear that employers, almost universally, with the exception of the public sector, have made the decision that the future for them as an employer is having money purchase pension arrangements because that passes all the risk to the employees," he said.

Doctors may have heard of money purchase schemes under another name, defined contribution plans.

Mr Hamilton predicted that current schemes will only be found in the public sector, meaning private doctors may have radically different savings schemes from their NHS counterparts.

A new Personal Accounts scheme will be launched by the Government in 2010 with the aim of getting more people to save for their retirement.

Source: Adfero