The extension of auto-enrolment (AE) to more workers is supported by around three-quarters of businesses, according to research by Scottish Widows and the Confederation of Business Industry (CBI).
The survey – which questioned 240 firms – revealed three quarters (74%) of businesses want AE to be made available to the self-employed and also support the £10,000 earnings threshold being reduced or removed to support better retirement saving.
The research also revealed AE is mostly understood by employers, with just 7% struggling to understand their duties, and 16% finding it difficult to know how to assess employee eligibility.
There was also a unanimous recognition of the business case (98%) and moral case (95%) for providing a competitive workplace pension, with 75% believing that a competitive pension scheme impacts their ability to recruit and retain employees while 64% believe it motivates their staff.
While 71% believe employers will need to increase their contributions at some point in the future to ensure their employees have sufficient income in retirement, just 27% support increasing employers’ contributions at this stage.
The majority (93%) of firms surveyed think the focus on achieving higher contributions should be on increasing employee engagement with their pension to boost voluntary contributions, with three quarters (76%) urging the government to prioritise educating people about the importance of engaging with their pension.
CBI chief UK policy director Matthew Fell said: “AE must be extended to the self-employed and more of those holding down multiple jobs. 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 AE review and fully assess the impact of the increase to contributions in April 2019.”
Scottish Widows head of policy Pete Glancy added: “As policymakers review the impacts of the 2019 increases and start to consider how best to achieve the necessary level of savings, it’s going to be important to find solutions which minimise increases to the overall costs of labour.
“British businesses have played a huge role in the success of AE and it’s encouraging to see that the overwhelming majority of business leaders view providing a competitive workplace pension provision as a win-win for employers and employees.”
The People’s Pension director of policy Gregg McClymonth said it was “encouraging” to see that employers support the changes to AE to support lower earners.
He added: “What is crucial is making pension contributions count from the first pound of someone’s salary and reducing how much a worker has to earn to be eligible for an AE pension, to the national insurance threshold – around £8,000 a year.”