A survey of 284 pension schemes by Incomes Data Services has shown that contributions by employers have increased by nearly 50% in a year. Total contributions from employers are now at £8.3 billion, up from £5.5 billion last year. The big rise is seen to be an attempt by large companies to fill the gaps in their pension funds, but this enormous cost for employers could mean worse retirement provision for its employees in the future.
Our view
The problem with pensions is that the staff very rarely value the benefit that their employer is providing. It is not often that we find employees paying in the same amount to their pension as their employer. Should employers really bother? Should responsibility fall back on Government to legislate and force people to save. We believe complusory pension contributions is just a few years away.