1 in 5 SMEs to contribute more than the minimum for auto-enrolment
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Nearly one in five (17 per cent) employers plan to contribute more than the legislative minimum when they enrol their employees into a workplace pension, research finds.
Of the 450 small and medium-sized
enterprises (SMEs) surveyed by NOW: Pensions, 8 per cent say they intend to pay
more than the minimum with a further 9 per cent stating that they will pay the
minimum initially, with a view to increasing contributions over time.
More than half (56 per cent) of respondents who intend to pay more than the minimum say they believe it will help with the recruitment and retention of employees.
Four in ten think the minimum employer contribution has been set too low by the government. More than a third (39 per cent) hope that by contributing more, their employees will be encouraged to do the same.
Nearly a quarter (24 per cent) of companies surveyed say they don’t offer any other benefits so are happy to spend a bit more on providing a more generous pension.
Of those that intend to contribute more than the minimum, more than half (54 per cent) haven’t decided how much more they’ll contribute while nearly a quarter (24 per cent) say they intend to contribute 1 per cent more than the legislative minimum – a figure that over time, could equate to an additional £49,296 in the pension pot of someone on an average UK salary.
NOW: Pensions CEO Morten Nilsson says, 'The perception is that large firms offer better pension provision than their SME counterparts but this isn’t necessarily true. Smaller companies very often know their employees personally and have a more paternalistic attitude.'
Of the 40 per cent of firms that plan to make minimum contributions, four in ten (41 per cent) say it is because their focus is on ensuring compliance.
A third (33 per cent) claim they want to keep things simple and think paying more would complicate matters, while over a quarter (26 per cent) say keeping costs low is a priority. A further one in five (21 per cent) say trading conditions are difficult so they are tightly managing their employee remuneration.
From April 2014, businesses with between 250 and 160 employees will need to be ready. Firms with fewer staff members will be required to comply with the rules by a particular ‘staging date' according to their size up until 2018. Find out more about your duties as an employer here.
How can ActSmart help?
ActSmart have made arrangements to introduce you to Elliott Sanders of Copthorne Hundred Wealth Management, a Partner Practice of St. James's Place Wealth Management.
St. James's Place Wealth Management are one of the leading wealth management organisations in the UK with a national network of advisers. Using their experience, they offer businesses and individuals a wealth management service, incorporating pension advice. The advice is face-to-face and tailored to your business or personal objectives.
• Complimentary initial consultation
• Face-to-face advice
• Impartial advice
• Advice is guaranteed by St. James's Place when recommending any products or services provided by the St. James's Place Group
Find out more about auto-enrolment here or phone Elliot Sanders's team on 01372 721616 / email copthorne@sjpp.co.uk.