Employers fail to equip staff for comfortable retirement

Many employers are failing to equip their staff for a comfortable retirement, according to the latest findings from Barclays Financial Planning.

The findings show that one in ten small and medium size employers do not offer their staff a company pension scheme - despite Government regulations deeming this a necessity for all companies. Just one in eight companies (13 per cent) believe their staff make sufficient contributions that will secure them a comfortable retirement but 42 per cent of employers insist that their staff make a mandatory contribution to their pension scheme- a factor that will have a critical effect on their income when they retire.

The findings form part of an ongoing study by Barclays Financial Planning into the attitudes and awareness of the people responsible for employee benefits in small to medium sized companies. The survey was conducted by Mori amongst 200 companies with a turnover of £1m to £15m.

Stephen Ingledew, Director of Barclays Financial Planning comments, "With the effort the Government has made over recent years to raise awareness of the importance of pensions it is surprising that there are still a number of companies who are failing to provide their staff with a pension scheme. With the rise of pension schemes designed to help people secure a comfortable retirement, companies should be highlighting the importance of pensions and retirement planning as a whole emphasising them as a key factor in their benefits package. A small contribution by employees on a regular basis will have a material effect on their quality of living during retirement. Employers should shoulder some responsibility in conveying to staff the importance of contributing to their pension schemes so they can have a more comfortable retirement."

The findings show that on average, employees contribute 4.78 per cent of their salary towards their pension - a little less than employers' average contributions of 4.82 per cent. Of those who control their company pension scheme, 85 per cent think that this is a responsibility companies should take seriously in order to help secure their employees' future. However, many are failing to act on this as of those who look after pensions just 13 per cent think that their staff are making sufficient contributions. 46 per cent of companies do not think that their staff are paying enough towards their pensions and have put the emphasis on their staff to pay more. Only 5 per cent of those businesses surveyed believe they will increase contributions to help staff.

The responsibility for administering pensions and benefits sits largely within HR departments of small to medium sized businesses (32 per cent of businesses). 25 per cent of company owners and managers look after employee benefits, compared to 15 per cent of payroll departments and 10 per cent of office managers and company secretaries. Just 5 per cent of Finance Directors and two per cent of financial controllers take responsibility for staff benefits.