Pensions under threat
Dec 20 2006
Nearly half of all SME employers (49 per cent) predict the proposed National Pension Savings Scheme will result in the levelling down or closure of company pension programmes, says new research.
According to a survey of 200 small to medium-sized businesses conducted by Barclays, 31 per cent of the UK’s SME employers believe that the National Pension Savings Scheme (NPSS) will result in companies seeking to reduce their contributions in line with the Government's proposals.
UK employers currently pay an average contribution of 4.2 per cent of salary to their employee pension scheme, says the study, compared to the mandatory contribution of three per cent required under the NPSS changes. Currently, just 24 per cent of pension schemes have near full take-up of membership by eligible employees.
Worryingly, the survey shows that more than half of all employers are unaware of the NPSS proposals - 41 per cent claim that they have heard about the proposals but know nothing about them, while 15 per cent have never heard of them.
Stephen Ingledew, director at Barclays, comments: ‘Our research shows that many businesses are completely unaware of the changes and therefore unprepared for introducing the National Pensions Savings Scheme to their staff. The scheme will have invaluable benefits in increasing employee contributions.
‘However, there is a strong danger that employees currently participating in their company pension scheme will see a decrease in the contributions made by their employer. I would urge companies to take note of the changes and use the lead time until they are implemented to realise the financial and motivational benefits for their workforce of a good company pension scheme.’
For more information on Government pension proposals, click here.
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