The new Pensions Act will fundamentally change the way that people save for their retirement, the Department for Work and Pensions (DWP) has claimed.

Under the terms of the new legislation, which received Royal Assent today (November 27th), people entering a job will be automatically placed into the companys pension scheme. This, the DWP stated, will be a development which will mean that every person working in the UK, whether on a high or low wage, will now be able to save for their retirement more effectively.

And in providing adequately for their retirement, older savers may find they are more easily able to pay off any outstanding debts after they finish work. Such commitments could include mortgages, credit cards, personal loans or utility bills.

Commenting on the new legislation, secretary of state James Purnell insisted that workers with irregular working patterns will now also be able to ensure they can put money aside for the future, adding that the new auto-enrolment procedures should make it easier for millions of Britons to save more effectively.

Meanwhile, pensions minister Rosie Winterton said that the new measures will provide a strong incentive for workers in low-wage jobs through matched contributions, tax breaks and investment opportunities.

“It is estimated that there are around seven million people in the UK who are not saving enough to generate the pension income they are likely to want, or expect, in retirement. But now, those who work for small employers, the local supermarket or pub for example, will get access to a workplace pension. We have worked closely with all groups who have an interest in delivering a pensions system that is fair to all and can encourage saving. It is now up to all of us to help deliver on this new settlement,” Ms Winterton urged.

Tim Jones, chief executive of the Personal Accounts Delivery Authority, added that the Royal Assent paved the way for the organisation to begin working towards an era of easier savings through the establishment of personal accounts, with procurement processes for the core functions of the savings vehicles set to begin in January 2009.

Brits who have seen their ability to save for the future diminish in recent months as energy, fuel and food costs have risen may wish to consider taking out a debt consolidation loan in order to reorganise their finances. In applying for this type of loan, consumers could find they are able to stretch repayments over a longer period, thereby leaving them with more disposable income each month which could in turn be placed into a high-interest savings vehicle to help them on the road to financial recovery.

Applying for a loan of this type may be of particular interest to younger generations after Nick Clegg warned earlier this month that many children and teenagers stand to inherit a legacy of debt. The Liberal Democrat leader called for a fundamental change to the way that younger generations handle their money through the promotion of financial education and support.

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