A new study from one of the country's leading stockbrokers has revealed that employers are increasingly taking a 'paternalistic' view of their employees and are showing overwhelming support for auto enrolment.
When auto enrolment was first mooted, many people though that the policy would be met with resistance by employers who would see it as disruptive and burdening. However, the reality has been much different with the vast majority of employers being very positive. Since the start of auto enrolment in 2012, the report states that four out of five employers think that the minimum contributions payable under auto enrolment should rise, with the vast majority of them saying that they would be happy to help shoulder the cost of increased retirement saving. 6% of employers that were surveyed said that they would be happy to cover all of the cost of a rise in pension contributions with 31% saying that they would be happy to bear a greater share of the cost increase.
The report also showed that a total of 60% of employers backed auto enrolment to be used through the workplace to help nudge employees towards building an emergency cash fund and therefore improving financial resilience. The other key takeaway from the report was that more than 53% of employers questioned think that all earnings should count for a pension contribution, whereas currently there is no obligation to pay a contribution on the first £5876 of pay which many say penalizes those on lower incomes.
The report comes as the government is currently reviewing the future of auto enrolment and how it will change to fit the needs of an ever-changing world of work. Issues the government is reportedly looking at include how auto enrolment can be extended to the growing numbers of self-employed people and those that are part of the 'gig economy'.
Nathan Long, senior pensions analyst at Hargreaves Lansdown who carried out the survey, commented:
"Auto-enrolment was met originally with groans from employers who perceived further disruption to their staff and an increase to their staffing costs. Only five years on and employers are now calling for auto-enrolment to go further."