Around one in five or 18 per cent of employers said they do not offer any pension scheme to new employees and three in ten or 30 per cent didn’t know, according to the Department for Work and Pensions (DWP)
The 2022 Employer Survey, commissioned by the DWP and conducted by IFF Research with 8,002 employers in Great Britain, aimed to gain insights into various aspects of employer attitudes and practices.
According to the survey, 42 per cent of employers provide a defined contribution pension scheme to new employees, while only 4 per cent offer a defined benefit scheme. Around 18 per cent of employers don’t offer any pension scheme to new employees, and 30 per cent are unsure and among those offering a pension scheme, 87 per cent offer a defined contribution plan.
But it also found that the majority of businesses actively promote employee health and wellbeing, with seven out of ten addressing it proactively and nearly nine out of ten offering assistance to prevent employee ill-health.
Flexible working arrangements, such as reducing working hours gradually for people nearing retirement, were prevalent. However, one out of every five firms saw no business benefits in implementing such regulations.
The survey found that a shortage of applicants with appropriate abilities and a low overall application number was among the recruitment challenges. While half of the companies tracked worker diversity, only about a third did so per school level.
Standard Life managing director for workplace Gail Izat: “2022 was a tough year for both households and businesses with high inflation starting to take its toll, and it seems that pensions are low down employer’s list of priorities. Despite the introduction of auto-enrolment in 2012 meaning all employers have to offer a pension to entitled workers*, 18 per cent of employers surveyed said they don’t offer their employees a workplace pension and 30 per cent said they didn’t know.
“While some respondents could be sole traders, this means almost half of employers are unaware of the pension offering and are likely relying on support from payroll suppliers and others to manage contributions on their behalf.
“It’s understandable that short-term concerns have outweighed longer-term priorities in recent years, with just keeping the lights on a challenge for a huge number of businesses. However, with Defined Contribution (DC) pensions now massively more common than Defined Benefit (DB) Pensions – 42 per cent of employers surveyed said they offered DC, 4 per cent DB– it’s never been more important that employers and employees engage with their pension scheme as DC schemes depend not only on employer contributions but on employees contributing too, as the responsibility increasingly shifts to individuals to take greater responsibility for their pension savings.
“Financially healthy employees are crucial to the success of any business and pension saving forms an important part of this. Government and providers both have a big role to play in ensuring pensions are as easy as possible for overworked employers to understand and engage with.”
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