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Spend & Save

New rights for savers and working parents

Money and work issues featured prominently in last week's Queen's Speech. In the forthcoming session of Parliament, the Government will introduce laws concerning pensions, savings accounts and flexible working rights.

Following the Northern Rock crisis – the first run on a UK bank in 140 years – the Government will move to increase compensation for depositors whose banks go under. And a long-trailed law will be introduced that means that by 2009 money held in so-called dormant bank accounts – untouched for 15 years – will be moved into a fund for distribution to good causes.

Pensions are also set for a shake-up, with a Bill proposing the introduction of automatic enrolment into personal accounts for workers who are not already members of a more lucrative workplace scheme. With contributions from employers, employees and the Government, the equivalent of 7 per cent of salary will be paid into the accounts. An earlier proposal to run the system from Whitehall seems to have been ruled out and it looks as if big- name insurers will get to manage it.

More of a surprise was the Government's decision to introduce legislation to extend flexible working rights to more parents. At present, those with children under six, or disabled children, can ask their employers for permission to work flexible hours. The employer can refuse but has to give a reason for the refusal. This right is to be extended to parents of "older children", although it is not clear yet whether this will mean up to the age of 16 or even 18.