Almost half of UK employers oppose reducing the lower trigger rate for pension auto-enrolment from an annual salary of £10,000 for their employees.
30 NOV 2017 | CHRIS SEEKINGS
That is according to a survey of employers by the Association of Consulting Actuaries (ACA), which also finds around 40% of staff working for smaller firms are excluded from auto-enrolment.
In addition, 44% of employers do not want to increase their minimum contributions to workers' pension saving from the 8% of earnings they will be required to post-April 2019.
The research concludes that a combination of low-income workers, and those that are self-employed, could leave 12 million people largely relying on the state pension in retirement by 2018.
"We see little prospect to address the fears of a growing gulf in retirement incomes from one generation to the next without commitment from the government to ensure that sums saved into auto-enrolment are meaningful" ACA chairman, Bob Scott, said.
It was also found that the number of employees opting out of auto-enrolment is rising, and is expected to increase further over the next two years when mandatory minimum contributions rise.
The research forecasts opt-out rates to increase to 16-20% after April 2019, compared with the 11-15% at present, while these are already approaching 25% in smaller firms.
A report from the Resolution Foundation found the temptation to opt-out will grow as the take home pay of a typical employee rises by £1,700 by 2021 if they stop contributing to pension saving.
Despite reluctance from employers to increase contributions, the ACA research shows 41% support a gradual increase, and that 44% would back lowering the salary eligibility trigger point.
In addition, 57% think the self-employed should be brought into pension auto-enrolment, and more than three-quarters support additional help for those on lower incomes.
"The increases in contributions come very soon after their staging date for auto-enrolment and land in the middle of sizeable projected increases in the 'living wage' and pre-Brexit economic uncertainties," Scott continued.
"To give subsequent generations a decent chance of enjoying adequate retirement incomes, we call on the government to review its spending plans, tax rates and incentives."
