PensionsNov 9 2015

Employers aren’t armed to overcome saving inertia: Aegon

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Employers aren’t armed to overcome saving inertia: Aegon

Research from Aegon UK found while 68 per cent of employers felt a greater duty of care towards employees involved in a workplace pension scheme, 95 per cent encountered hurdles preventing them from offering the required support.

While 39 per cent of 508 UK businesses polled in September believe that digital tools are essential in increasing pension engagement, 22 per cent believe that onsite training by financial advisers would help plug the gap.

In total, 67 per cent of those surveyed felt held back by a shortage of time with 23 per cent feeling restricted by associated costs.

Angela Seymour-Jackson, managing director of workplace solutions at Aegon UK, said: “Now in our third year of auto-enrolment, its reassuring to see nearly all businesses taking their role to offer proper employee support alongside a company pension seriously.

“However, its clear that not all are in a place to dedicate the time and resources needed to get their workforce ready for retirement. As the programme is rolled out to the UK’s 4.9 million businesses with under 50 employees, it is vital that employers are properly armed to overcome the saving inertia associated with auto-enrolment.”

Last week data released by the Department for Work and Pensions showed 91 per cent of public sector workers who are eligible for auto-enrolment schemes have a workplace pension in comparison to 63 per cent of private sector employees.

Despite this, since the implementation of auto-enrolment legislation, the number of private sector worker participating in the schemes has increased from 5.2 million (42 per cent of the workforce) to 9.2 million between 2012 and 2014.

Overall 89 per cent of those working in large companies (with over 5,000 members of staff) were enrolled in their workplace pension scheme in comparison to the 12 per cent of those working in micro-businesses.

These increases coincide with the staged implementation of automatic enrolment, which began with the largest employers and will end in 2018.

The data also showed the gender gap has balanced with both genders having the same level of participation across the public and private sector.

Despite this, there is a noticeable difference between the sectors in participation levels.

While levels of participation reached 83 per cent in sectors such as public, administration, health and education only 26 per cent of those in the agriculture sector used a workplace pension scheme.