Auto enrolment pensions are thought to be too expensive for employers.
The latest Close Brothers Business Barometer* shows that up to a third of UK business owners are not in favour of auto enrolment pensions.
The survey is carried out on a quarterly basis to obtain the opinions of business owners on a variety of issues that affect their organisation. Results showed that respondents do not feel the legislation will provide much benefit for the future.
The survey also highlighted that as many as 31% believe, due to financial constraints, that employees will choose not to participate with the scheme.
Furthermore, the survey showed that as many as 35% of UK business owners think that these new requirements will be too expensive for employers to achieve at a time when the majority of businesses are focusing on making ends meet.
David Thomson, CEO of Close Brothers Invoice Finance, said:
“It is evident that many SME owners are not seeing the value in auto enrolment. Many feel that it is an additional expense at a time when UK businesses can least afford it. There seems to be a level of reluctance to embrace the legislation, with many employers believing that their staff will choose to opt out anyway.
“The financial squeeze remains a key obstacle to retirement saving and we are right to be concerned that many are just not saving enough. However, the survey also showed that a number of employers are in favour of the legislation, with nearly half of those surveyed stating it’s important because they care about their staff and think it’s vital for them to plan for their future.”
The barometer continued to reveal that 60% of those firms that are backing auto enrolment pensions think that it is a sensible measure, that will help people live comfortably in retirement.
20% of those that are in favour of the new requirements think that they will advance to a happier working environment which will provide employees with a greater sense of security.
Mr Thomson said: “With the UK’s aging population, it is essential that employers and employees alike take the time to plan for the future, despite the current economic situation."
*The Close Brothers Business Barometer is conducted on a quarterly basis. It canvasses the opinion of SME owner managers on a range of issues affecting their business.
