Thousands of workers in Yorkshire, ranging from electricians to factory employees, will soon be able to join a "pioneering" pension scheme just launched by a leading union and a mutual life provider.

The Amalgamated Engineering and Electrical Union and Friends Provident have linked up to target 250,000 workers nationally who have no access to an occupational pension.

Union general secretary Ken Jackson said it was clear workers will have to make provision for their retirement because the social security benefit system was "creaking at the edges".

The new "stakeholder" scheme, which will be promoted at factories across the United Kingdom, was launched ahead of the Government's long-awaited Green Paper on pensions due out later in the autumn.

And with a high concentration in Yorkshire of engineering and electrical companies, many of them not offering company pension schemes, the county is expected to be a prime target for co-operation with employers to ensure the scheme is up and running by Christmas.

Mr Jackson told a London news conference that the new scheme, offering low charges, no penalties for transferring to another job or being unemployed, and protection in case of ill health, has been designed to meet the Government's stakeholder vision and was launched following two years of research by the union.

Mr Jackson said the pension will make a real difference to working people's lives, adding: "Its low charges, simple and flexible terms make it excellent value for money."

Keith Satchell, Friends Provident chief executive, said: "This is the shape of future pensions."

There will be a minimum contribution of £40 a month and the union believes that 50,000 AEEU members will sign up in the next three years. Every penny of each contribution is invested. There will be no policy charges, no penalties for stopping and varying contributions and no transfer charges.

Other unions are expected to follow suit to cater for the estimated figure of up to six million workers in the UK who do not have an occupational pension.

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