Around one in three SMEs are planning to contribute more than the legislative minimum when they register their employees for pensions as part of the auto-enrolment scheme.
This is according to new research conducted by workplace pension provider NOW: Pensions.
The study involved surveying 400 small business owners across the UK.
The results revealed that the number of SMEs wanting to contribute more has almost doubled in the past year – from 17% to 30%.
Aside from this, 13% of those questioned said they plan to pay the minimum initially with a view to increasing contributions over time – an increase from 8% the previous year.
More than 1.2 million of Britain’s small and micro firms have yet to get on board with the auto enrolment programme being rolled out by the government.
Are SMEs becoming more open to the benefits of providing better pensions?
More than half of business owners surveyed (57%) said they wanted to offer more than the minimum pension payments in a bid to help with recruitment and hold onto valuable employees.
Around 51% believed paying in more would encourage their staff to do the same, 39% considered the minimum contribution of 8% to be way too low for a comfortable retirement and 24% said they were happy to do this as they didn’t provide any other employee benefits.
Morten Nilsson, CEO at NOW: Pensions, said:
“The perception is that large firms offer more generous pensions than small companies but, this isn’t necessarily true.
“Many small employers want to offer their staff a benefit they’ll genuinely value and are willing to put their hand in their pocket to do so.”
Of the SMEs planning to meet the minimum pension payments, 36% said this was to focus on ensuring compliance, while 32% wanted to keep things simple and believed paying more could complicate matters.
A further 24% said they didn’t really want to provide pensions in the first place.
As a small business owner, will you be paying higher than the minimum pension payments for your employees?
Let us know your views by tweeting us @TheInsuranceOct.