Businesses maintain pension contributions despite Covid-19
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The vast majority of businesses with defined contribution schemes did not reduce their pension contributions during the pandemic despite the difficulties of COVID-19 (92%), according to the latest CBI/Mercer Pensions Survey.
Most employers (86%) overwhelmingly continue to see a strong business case for providing competitive workplace pensions, with the same proportion believing that they have a moral obligation to help staff to save for retirement.
This year’s survey, completed by 221 firms - comprising 350 respondents, including 186 senior executives and 164 pension scheme managers - revealed that:
The majority (76%) of senior executives who responded to the survey believe that contribution rates higher than the current 8% statutory minimum will be required in future to ensure that employees have sufficient retirement income.
There are much higher levels of business support for raising minimum automatic enrolment contribution levels over a five-year period (78%) rather than over the next two years (47%).
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In the meantime, more than 7 in 10 employers (74%) believe that business must do more to engage staff with pensions savings. 87% of respondents also said that the Government should prioritise educating people about the importance of pensions over the next two years.
Matthew Percival, CBI Director of Skills and Inclusion, said: “The vast majority of firms providing both defined contribution and defined benefit schemes maintained the amount that they pay in because they value the importance of competitive workplace pensions, despite the disruption caused by COVID-19.
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“Businesses know that they have a vital role to play in offering advice to employees about saving for retirement. It’s also crucial that the Government educates people about the importance of having a pension.
“Employers are eager to build on the stand-out success of auto-enrolment and know that higher business contributions will be needed in future. But with firms only beginning to recover from the pandemic, and while they’re prioritising investing in more immediate pay and conditions to address labour shortages and rising living costs, any increase must take place over the next five years rather than in the short-term.”