The debate surrounding whether or not employers should make compulsory contributions to their employees' stakeholder pensions is in the news again.
This time, support has been given against compulsion due to the raft of unsatisfactory repercussions that could emerge.
The Government needs people to save for their future and their retirement and stakeholder pensions were introduced as a possible measure to help. Many people believe they have been a complete failure, despite the minimum premium being £5 per week.
In reality, these pensions have been taken up by those needing extra tax-breaks and not for those whom they were intended.
Our View
Why should employers have to be responsible for their employees? Human nature is that of apathy and 'the State will look after us'.
Employers generally know more than most that this is not the case and is never likely to be the case. But, why should the burden fall on them to make employees save?
Our view is that the whole State system needs an overhaul and people should not be prevented from saving due to concerns over means testing making them worse off than people that have not saved.
Whilst many surveys in the past have shown employees in favour of compulsion, they are just surveys. When it actually comes down to receiving a reduced pay packet, how many would turn round and say thank you!