Pensions

‘Overwhelming support’ for auto-enrolment pension schemes

The return of “paternalistic employers” has been hailed in a new report ahead of the fifth anniversary next month of pensions auto-enrolment.

A study from stockbroker Hargreaves Lansdown, covering more than 400 employers, shows “overwhelming support” to expand auto-enrolment to get more people saving more and for more purposes.

• READ MORE: Management news

Auto-enrolment began in October 2012, and the report says four out of five employers said they think minimum contributions under the process should rise. The majority also said they were happy to help shoulder the increased cost of retirement saving.

A total of 6 per cent believe they should cover all the cost of a contribution increase, whilst 31 per cent think they should bear a greater share of the cost increase.

• READ MORE: Pensions watchdog on hunt for rogue employers in Edinburgh

A total of 60 per cent said they backed using automatic enrolment through the workplace to nudge employees towards building an emergency cash fund and so improve financial resilience.

And more than half (53 per cent) think all earnings should count for a pension contribution, whereas currently there is no obligation to pay a contribution on the first £5,876 of pay “which penalises lower earners”.

• READ MORE: 1 in 4 Scots ‘saving nothing for retirement’

It comes as the government is currently reviewing where they go next with auto-enrolment, with a response expected by the end of 2017.

Nathan Long, senior pensions analyst at Hargreaves Lansdown, commented: “Auto-enrolment was met originally with groans from employers who perceived further disruption to their staff and an increase to their staffing costs.

“Only five years on and employers are now calling for auto-enrolment to go further.”

Click here to ‘Like’ The Scotsman Business on Facebook

Leave a Reply

Your email address will not be published. Required fields are marked *

4 × 4 =