Businesses support extension of pension auto-enrolment
Employers support the targeted extension of automatic enrolment to more workers, according to a survey by the Confederation of British Industry (CBI) and Scottish Widows.
The poll found 74 per cent of businesses want to see auto-enrolment made available to the self-employed and those earning less than £10,000, allowing for more part-time workers and those with multiple jobs to better save for their future retirement.
The survey of 240 firms found near unanimous recognition of the business case (98 per cent) and moral case (95 per cent) for providing a competitive workplace pension.
The survey found that auto-enrolment is well understood with only one in 14 firms (7 per cent) struggling to understand their auto-enrolment duties, and only one in six (16 per cent) have difficulty understanding how to assess employee eligibility.
More than seven in ten businesses (71 per cent) believe that for their employees to have sufficient levels of retirement income, employers will need to make higher contributions to auto-enrolment schemes at some point in the future.
Matthew Fell, CBI chief UK policy director, said: “More people are saving into a pension than ever before and businesses believe that auto-enrolment has been a run-away success that must be built on.
“If we’re to get even more people into the habit of saving, then auto-enrolment must be extended to the self-employed and more of those holding down multiple jobs. But while higher contributions will be needed in the future, now is not the time to raise mandatory contributions again. The government must first be given the chance to deliver the findings of the automatic enrolment review and fully assess the impact of the increase to contributions in April 2019.”
Pete Glancy, head of policy at Scottish Widows, said: “While automatic enrolment has made an unprecedented positive impact on long term saving, the UK is still falling short. We know that 60 per cent of 20 to 29-year-olds are not saving enough for retirement and more than a fifth of UK adults expect they’ll never be able to afford to retire.
“As policymakers review the impacts of the 2019 increases and start to consider how best to achieve the necessary level of savings, it’s going to be important to find solutions which minimise increases to the overall costs of labour.”