Many firms ‘failing to offer pensions schemes’

A new study has indicated that many British businesses are not offering new employees the opportunity to sign up to pension schemes, with others failing to make sufficient contributions.

Research carried out by the Association of Consulting Actuaries (ACA) found two-thirds of companies with less than 250 staff provide no pension arrangements, while one-fifth intend to scrap theirs when new legislation comes into effect.

From 2012, bosses will be obliged to enrol workers into pension schemes and the newly-formed National Employment Savings Trust will allow individuals to save money where their employer declines to provide pension provisions.

“It is concerning that the minimum levels of contributions under the auto-enrolment policy are very modest,” said ACA chairman Stuart Southall. “If these levels become the norm, emerging pensions are likely to disappoint.”

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Last October, Labour peer Lord Hutton suggested that public sector pension contributions should be altered to a career average system, with the government and state employees sharing more of the burden.

Posted by Ross George