Auto Enrolment to Curb the Pension Slump?
The Department of Work and Pensions (DWP) has published new research which reveals that the number of employees saving through a workplace pension scheme has fallen by 15% since 2007.
The DWP report, Employers’ Pension Provision Survey 2011, which excluded sole traders and public sector employees from its research, also says that only a quarter (26%) of workers are actively saving for their retirement. In 2007 the figure was 31%.
The number of private sector employers offering a pension scheme was down from 41% in 2007 to just 31% in 2011 although stakeholder pension schemes (19%), group personal pension (GPP) schemes (5%) and occupational pension schemes (3%) were also available. 10% of employers were making contributions to their employees’ personal pension schemes.
The report found that 45% of employers without a current workplace pension scheme intended to auto enrol all their workers into the new NEST scheme – the National Employment Savings Trust.
A further 11% of firms said they would set up their own scheme and 5% of businesses added that they would use a combination of bith their own scheme and the new NEST pensions.
Pensions Minister, Steve Webb, spoke about the new pensions, saying:
"Automatic enrolment into workplace pensions will start the monumental shift we need to get millions more people in Britain saving for their retirement."
"It’s a major change for business too, especially for firms that don’t currently offer pension schemes for staff and it is good news that so many say they will use NEST."
"NEST is designed around the needs of people who are new to pension saving, with low charges, costs and easy to use services. We expect around half of all new savers to be NEST members, including many low-paid and part-time workers, women and young people, who will get a contribution from their employer for the first time."
Most of the firms questioned intend to keep their members in their current scheme (60%) with 19% expecting to enrol new members in NEST. 6% of the businesses asked said they would move all their current and new employees into the new auto enrolment pension plans.
For full information on auto enrolment see The Pensions Advisory Service.