Research NOW: Pensions recently conducted with small firms across the length and breadth of the country revealed that those working in the North have won the postcode lottery when it comes to generous employer contributions.
Of the 400 small and medium sized companies surveyed, just 12 per cent of those in the South said they are planning on paying more than the minimum auto enrolment contribution for employees, compared to over a quarter of firms in the North and 16 per cent of those in the Midlands.
The North also lucks out on employers most likely to increase their contribution, with 18% of firms saying they plan to pay the minimum initially, with a view to increasing their contribution over time. The South is unlucky again, with only 12% intending to increase their contributions, as are the Midlands, with only 11% of firms planning to up their payments.
Thinking about auto enrolment at your company, do you intend to pay more than the minimum employer contribution?
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Compared to similar research conducted by NOW: Pensions last year, the country has been turned on its head with regard to generosity of employer contributions. Last year the South came out on top with 11 per cent of firms planning to pay in more than the minimum contribution, whilst in the North only 5 per cent of employers intended to contribute more, and only 6 per cent in the Midlands.
The main reason for this increase in intention to pay more than the minimum in the North is down to the fact that two thirds of employers in the region believe that contributing more than the minimum will directly help with the recruitment and retention of employees. Two out of five believe that by contributing more than the minimum, they will encourage employees to do the same. Across the board, in all three regions, more than a third of employers surveyed believe that the minimum employer contribution has been set too low for a comfortable retirement.
Contributing even a small amount more than the legislative minimum can make a big difference to employees’ pension pots which is why NOW: Pensions offers five different contribution models. For more information on the options available, click here.