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Northern firms make the most generous pension contributions

07 August 2015

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More than a quarter of SMEs in the north of the country are planning to pay more than the minimum auto-enrolment contributions.

Of 400 companies surveyed by Now:Pensions, 26% of those in the North said they would pay a higher amount, compared to 16% of companies in the Midlands and 12% in the South.

Northern companies are also more likely to increase their contribution, with 18% saying they plan to pay the minimum initially with a view to increasing their contribution over time.

In the South, 12% said they intended to increase their contributions and 11% of firms in the Midlands planning to up their payments.

The findings of this year's survey by Now:Pensions contradict the findings of last year's survey, which showed that 11% of firms in the South planned to pay more than the minimum, compared to just 5% in the North, and 6% in the Midlands

Morten Nilsson, CEO, NOW: Pensions said: "It's good to see employers recognising that if they put more money into their employees' pensions, it could make working for their business a more attractive prospect."

Nilsson said the main reason for this year's increase in the North is down to the fact employers in the region believe contributing more than the minimum will directly help with recruitment and retention of employees.

Two out of five (41%) believe that by contributing more than the minimum, they will encourage employees to do the same.

Across the board in all three regions, more than a third (39%) believe the minimum employer contribution has been set too low for a comfortable retirement.

"The reality is that even when auto-enrolment is fully rolled out, a combined pension contribution of 8% still isn't going to be enough for most people," said Nilsson.

"Contributing even a small amount more than they are obliged to do can mean the difference between a frugal or comfortable retirement for their employees."

First published 06.08.2015

Lindsay.sharman@wilmingtonplc.com