DWP survey reveals shift towards auto-enrolment
Almost half of British firms with no pension scheme have chosen the National Employment Savings Trust for their workers, prompting pensions minister Steve Webb to claim auto-enrolment will turn around a recent slump in employee pension savings.
A poll by the department for work and pensions into employer pension provision found there had been a 15 per cent drop in employee pension saving overall, but 45 per cent of firms without a scheme said they intended to enrol all their employees into Nest.
The survey of 3093 private sector employers of all sizes found that 31 per cent of organisations currently offered pension provision for their staff, down from 41 per cent in 2007.
It found just 26 per cent of private sector employees were active members of their employer’s pension schemes, compared to 31 per cent in 2007. A further 11 per cent said they would set up their own scheme, while 5 per cent say they would use a combination of both.
Mr Webb said: “Auto-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.”
Helen Dean, managing director of scheme development for Nest, said: “The DWP research clearly demonstrates the need for auto-enrolment.
“Nest has been designed specifically to meet the needs of our members and their employers. We want to help people across the UK understand that tomorrow is worth saving for and how Nest, as a low-charge and easy-to-use pension scheme, can help them to do that.”
Tom McPhail, head of pensions research for Bristol-based Hargreaves Lansdown, said the introduction of auto-enrolment was vital in rebuilding pension provision, but added: “Employers and employees alike need to be actively encouraged to engage and plan ahead.”