Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • November 2017
11

Nearly half of employers reluctant to include more staff in pension auto-enrolment

Open-access content Thursday 30th November 2017 — updated 5.50pm, Wednesday 29th April 2020

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
web_pensionsaving_istock.jpg

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."


Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession

This article appeared in our November 2017 issue of The Actuary.
Click here to view this issue
Filed in:
11

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, 71-75 Shelton Street, London WC2H 9JQ. Tel: 020 7880 6200