EXCLUSIVE: Group personal pensions (GPPs) are the most popular primary schemes for auto-enrolment purposes, offered by 66% of respondents, according to research by Employee Benefits.
The Benefits research 2019, published in May 2019, surveyed 290 HR professionals, and found that GPPs have remained the most popular choice for a number of years, with a similar percentage offering these as their primary arrangement in 2018 (69%) and 2017 (67%).
However, there has been a change in the second most popular pension scheme, as this year sees 29% of the respondents providing a stakeholder pension and just 20% offering an open defined benefit (DB) scheme. Not only were these positions reversed in 2018, but the percentage of respondents offering an open DB scheme has also fallen substantially from 36%.
This trend is also evident in the rise of respondents that do not offer an open DB scheme, which has risen from 56% in 2018 to 76% this year.
One-fifth (20%) of respondents provide a DB scheme that is closed to new members but open to future accrual, as a secondary pension scheme.
With the lifetime individual savings account (Lisa), launched in April 2017, any individual aged between 18 and 40 can save up to £4,000 a year until they reach the age of 50, and the Government will match 25% of savings, up to a maximum of £1,000 a year. The savings can be put towards the purchase of a home for first-time buyers or taken as a retirement income from the age of 60.
When Employee Benefits conducted this research following the launch of the Lisa in 2017, just under a quarter of respondents (23%) thought that their organisation would contribute, but in 2018 this fell to 17%. The percentage has dropped further in 2019, as just 3% of employers contribute to the Lisa and only 4% plan to.
Click to download Employee Benefits‘ Benefits research 2019