The National Employment Savings Trust has released its latest report on auto-enrolment. The report draws on five years of research and insight. We have condensed the 40 page report into a short briefing for our members.
Employees – Who are they, and what do they think?
Auto-enrolment is set to create a new pensions consumer – largely male, with an average wage of £20,000, most of which is spent on month-to-month basics. The un-pensioned are more likely to be ethnically diverse, under 30, non-managerial and living in a low income household. Women are more often exempt due to part-time hours, making up a third of those eligible.
Auto-enrolment is well received amongst employees 70% say they will definitely stay in the scheme and 67% say it has helped them to worry less about the financial future.
However, many people in a pension scheme struggle to picture what happens to their money or where it actually goes.
Employers – What are their concerns, and are they ready?
Employers are not as confident in the positive future of auto enrolment. Only 50% say they are ready, though 5,000 say they have spent the last 10-18 months preparing.
Larger employers are more confident, but preparedness reduces with business size, with most small businesses saying they have not considered compliance requirements at all.
All employers surveyed considered ease of administration and communicating auto-enrolment to the workforce as general worries.
Small to medium sized employers expressed a general concern for the system, but were fuzzy as to individual points. Larger companies are more specific about their concerns, citing payroll integration and the administrative burden of a high staff turnover as the main issues.
All employers expected to get help and advice to implement and maintain the system before the cut-off date of February 2018. Pension providers and professional advisory services are both cited as places employers are going for more information, with high expectations, and at a much greater level than expected at the outset.
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