More than two-thirds (69%) of respondents offer a contribution of 6% or less of earnings to their employees’ pension savings, according to research by Punter Southall Aspire.
Its survey of 106 employers also found that 81% of respondents contribute less than 10% of earnings to their employees’ retirement savings.
The research also found:
- Nearly half (46%) of respondents contribute 5–6% of pensionable earnings to their staff’s retirement savings.
- 92% of employees only contribute between 0 and 5% of their salary to their retirement savings.
- Around half (49%) of respondents determine their level of contribution according to that of their employees.
- 68% of respondents offer pension salary sacrifice, including 82% of organisations with more than 500 employees and 58% with under 500 staff.
Alan Morahan, managing director at Punter Southall Aspire, said: “Contribution uplifts are essential if the government is to make further progress with its aim of increasing individual responsibility for retirement saving and reducing the burden on the state.
“The auto-enrolment contribution increases will be a step in the right direction but it looks like a sizeable gap remains between actual contributions and the amount people need to put away to retire with a reasonable standard of living, and at a time that suits them.
“There is also a danger that some employees contributing at the auto-enrolment minimum levels are lulled into a false sense of security, believing their contributions will be sufficient to deliver a meaningful retirement income.
“Employers can help by informing and educating their workforces.”