Businesses labelled the backbone of Britain's economy have embraced an initiative to encourage workers to sign up for workplace pensions, ministers said yesterday.
Research for the department of work and pensions (DWP) indicated micro and small employers are finding auto-enrolment of workplace pensions easier to roll out than expected.
Before the introduction of automatic enrolment, very few of the small and micro employers interviewed offered a workplace pension scheme at all, the DWP said. But it said its latest research shows smaller businesses "are now embracing the pension saving revolution".
Pensions minister Guy Opperman said:
Small businesses are the backbone of our economy and their success is vital to this country. That’s why I am so pleased that so many have embraced the challenge of enrolling their staff into a workplace pension, and are setting them on the road to a financially secure retirement.
However, separate research by the Pensions Policy Institute (PPI) questioned whether UK employers are "pulling their weight" when it comes to pension contributions.
UK employers are set to offer contributions of 37.5 per cent of the minimum employer contribution from 2019, well behind many countries including the likes of Italy (84.8 per cent), Denmark (66.7 per cent) and Japan (50 per cent).
In response, a DWP spokesperson said: “With 8.7m people now saving into a workplace pension, automatic enrolment continues to be a huge success.
“But we cannot be complacent and as contribution rates rise we know there is more to be done. That’s why our automatic enrolment review, which will report back later this year, will look at opportunities to increase people’s private pensions savings.”
Adrian Boulding, a director of policy at Now: Pensions said: “The auto-enrolment review should certainly consider if this balance is right.”