Employers want auto-enrolment contribution increase

Wellden Turnbull Guide to auto enrolment

More than three quarters of employers think that auto-enrolment pension contributions should be increased, according to research by Jelf Employee Benefits.

Employers operating auto-enrolment workplace pension schemes are required by law to pay a minimum of 1% into employees’ pension pots. This is due to rise to 2% from 1 October 2017 and 3% from 1 October 2018.

However, the research reveals that the majority of employers think this should rise further. The survey of 200 HR and finance experts found that 76% want minimum contribution rates to increase. Just 15% thought that no increase was needed.

The research found:

  • 85% of respondents said employers should bear part or all of the contribution increases
  • 14% thought employees should pay for increased contributions
  • 4 in 10 said they would raise contributions ahead of legislated increases to spread the cost over several years.

Steve Herbert, head of benefits strategy at Jelf, said:

“Frankly, we were a little surprised at these results. Many employers are yet to reach their staging date for auto-enrolment, and a significant proportion of those who have already staged are not yet at the full contribution rate. It is therefore somewhat surprising that employers appear so supportive about a further increase to their pension contribution costs already.”

Auto-enrolment minimum contribution schedule

Employer’s staging date

Employer minimum contribution Total minimum contribution
To 30 September 2017

1%

2%

1 October 2017 to 30 September 2018

2%

5%

1 October 2018 onwards

3%

8%

Contact us today to discuss what the workplace pension reforms mean for you and your business.

Contact Us

Call today to book your FREE no obligation meeting on
01932 868 444 or 0207 381 2022