DWP research: Only 28% of private sector firms offer a pension

Only 28% of private sector organisations offered some form of pension provision for their employees in 2009, down from 41% in 2007.

According to the Department for Work and Pensions (DWP) Employers’ Pension Provision Survey 2009, which it polled 2,519 private sector employers, most of the decline in overall provision was due to a reduction in the provision of contributions to employees’ personal pensions. If employers’ contributions to employees’ personal pensions are excluded, the findings show a decrease in employer provision from 33% to 27%.

The survey also found that, in 2009, pension-providing organisations employed just over four-fifths (82%) of all employees in the private sector.

Workplace stakeholder pension schemes continued to be the most common form of provision, offered by 23% of all firms. A minority (5%) provided group personal pensions (GPPs), 5% made contributions to employees’ personal pensions and 2% provided occupational schemes. Less than 1% made contributions to employees’ private stakeholder pensions.

Just over a quarter (27%) of private sector employees were active members of workplace pension schemes with 13% of all private sector employees belonging to occupational schemes.

Only 9% of non-providers expected to introduce pension provision in the next five years.

The most commonly cited reasons for not providing a scheme were: the organisation was too small (36%), pensions provision was too costly (15%), and staff did not want it (13%).

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