Employers have backed an extension of the auto-enrolment scheme to get more people to save into a workplace pension.
A survey of 240 companies conducted by the Confederation of British Industry and Scottish Widows found three quarters of employers (74 per cent) were supportive of extending auto-enrolment to the self-employed and those below the current £10,000 pay threshold.
The survey found overwhelming support for the government pensions policy introduced in 2012, with 98 per cent recognising the business case for providing a competitive workplace pension.
According to the research, more than seven in ten businesses (71 per cent) believed for their employees to have enough income in retirement, employers will need to make higher pension contributions in the future.
However, companies did not believe now was the right time for this change, as only 27 per cent of respondents were in favour of increasing employers’ contributions.
Instead, the vast majority of bosses (93 per cent) believed that businesses should focus on improving the engagement of their staff with their pension savings so contributions can get a voluntary boost.
In December 2018, the Department for Work and Pensions (DWP) published its long awaited auto-enrolment review, which announced a series of measures the government was looking to implement.
This included lowering the age of workers auto-enrolled into workplace pension schemes from 22 to 18 years and calculating contributions from the first pound earned, instead of the current £10,000 lower earnings threshold.
However, these changes will only by introduced in mid-2020s.
According to Matthew Fell, CBI chief UK policy director, to get even more people into the habit of saving, auto-enrolment must be extended to the self-employed and more of those holding down multiple jobs.
He said: "But while higher contributions will be needed in the future, now is not the time to raise mandatory contributions again.
"The government must first be given the chance to deliver the findings of the automatic enrolment review and fully assess the impact of the increase to contributions in April 2019."
Pete Glancy, head of policy at Scottish Widows said: "While automatic enrolment has made an unprecedented positive impact on long term saving, the UK is still falling short.
"We know that 60 per cent of 20-29 year olds are not saving enough for retirement and more than a fifth of UK adults expect they’ll never be able to afford to retire.
"Engagement is clearly a key priority for employers and they should look to see what help is readily available.
"Pension providers, corporate advisers and employee benefits consultants often offer a wide range of services to support employers wanting to engage their workforces with pensions, from help online or face-to-face support in the workplace, through to salary sacrifice arrangements."
On defined benefit schemes, the survey showed that eight in ten (81 per cent) respondents believed the government should offer more support for companies with final salary plans which are struggling with costs but want to remain as the sponsor of scheme.