Gail Izat, Managing Director for Workplace at Standard Life, part of Phoenix Group said: “2022 was a tough year for both households and businesses with high inflation starting to take its toll, and it seems that pensions are low down employer’s list of priorities. Despite the introduction of auto-enrolment in 2012 meaning all employers have to offer a pension to entitled workers*, 18% of employers surveyed said they don’t offer their employees a workplace pension and 30% said they didn’t know. While some respondents could be sole traders, this means almost half of employers are unaware of the pension offering and are likely relying on support from payroll suppliers and others to manage contributions on their behalf.
“It’s understandable that short-term concerns have outweighed longer-term priorities in recent years, with just keeping the lights on a challenge for a huge number of businesses. However, with Defined Contribution (DC) pensions now massively more common than Defined Benefit (DB) Pensions - 42% of employers surveyed said they offered DC, 4% DB– it’s never been more important that employers and employees engage with their pension scheme as DC schemes depend not only on employer contributions but on employees contributing too, as the responsibility increasingly shifts to individuals to take greater responsibility for their pension savings.
“Financially healthy employees are crucial to the success of any business and pension saving forms an important part of this. Government and providers both have a big role to play in ensuring pensions are as easy as possible for overworked employers to understand and engage with.”
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