More than three-quarters (77%) of employer respondents believe a workplace pension is an important employee benefit, according to research by Royal London.
Its survey of 325 organisations, which typically employ between 10 and 250 employees, also found that 66% of respondents would be prepared to facilitate employees increasing their pension contribution rates when they receive pay increases.
The research also found:
- 78% of respondents care about workplace pensions.
- 62% of respondents would be likely to match increases in employees’ pension contribution rates that are linked to pay rises.
- 35% of respondents believe the main responsibility for boosting workplace saving lies with the employee, compared to 30% who cite that pension providers should take the main responsibility for increasing workplace savings.
- 18% of respondents feel that the government should own the main responsibility for boosting workplace savings, compared to employers themselves (6%) or advisers (5%).
Steve Webb (pictured), director of policy at Royal London, said: “Although employers have many other things to concentrate on, they have a crucial part to play in nudging their workforce to save more.
“Most experts agree that the 8% total contribution rate which will be reached in 2019 will not be enough to provide a comfortable retirement for most [employees] on middle and higher incomes. The willingness of employers to consider automatic escalation of contributions to coincide with pay increases is very encouraging. This approach has worked well in the US and in some leading UK [organisations] and offers the best prospect of getting contribution rates up to realistic levels.
“To continue the success of automatic enrolment, schemes must be reviewed so that employer’s needs and long-term goals are met. But it’s not just about the scheme that’s in place; it’s about how its benefits are communicated to employees. Employers, under the guidance of financial advice, must look to send out regular and engaging communications to their staff to actively encourage them to save more.”
