Nearly three quarters (72%) of respondents are anticipating an increase in defined contribution (DC) pension contributions from employees who are close to retirement, according to research by Towers Watson.
Its Post-Budget DC pension strategy survey, which questioned 74 UK employers, found that one in five (20%) of respondents anticipate younger employees will do the same.
The research also found that two-thirds (66%) think that employees will be more engaged with their retirement savings since the Budget.
A further 66% of respondents think that employees will now place more value on their DC pension as part of their reward package.
One area in which the research found the Budget to not altered attitudes is the employer’s primary objective for providing a contribution to their employees’ DC pensions.
Only 16% of respondents said that their objective for contributing to DC schemes was to ensure employees had an adequate income in retirement, whereas nearly two-thirds (65%) stated the primary reason was to be market competitive.
The research also found:
- 30% of respondents are concerned that employees will exhaust their retirement funds before they retire.
- 8% of respondents worry that employees will run out of money in retirement.
Will Aitken (pictured), senior DC consultant at Towers Watson, said: “We are already seeing attitudes to DC pensions change significantly since the Budget in March.
“Many employers are feeling more positive about offering them and are expecting that their employees will feel the same way.
“One of the biggest changes could be the anticipated increase in contributions from employees of all ages as more people feel they have more control of their retirement savings and can see the tax advantages more clearly.”