“Selecting the right pension scheme for auto enrolment is important and has long term implications for employees. Taking time to review the options that are available in the market is sensible and planning ahead will help to keep stress levels to a minimum.” – Morten Nilsson – NOW Pensions
“Given the complexity of the pensions sector and the long-term commitment required to properly monitor the value of savings, most employees are not sufficiently knowledgeable or engaged in their work based pension to achieve good outcomes” -OFT -Sept 2013
Here are the detailed findings of a survey commissioned by NOW and carried out by BDRC Continental of 450 employers with 250 or less employees
| No. Employees | ||||||
| Total | Sole trader | 2-5 | 6-10 | 11-50 | 51-250 | |
| Employers surveyed | 450 | 50 | 75 | 75 | 150 | 100 |
| Employers in UK (000’s) | 1721 | 375 | 674 | 351 | 257 | 64 |
| I haven’t given it any thought yet | 751 | 275 | 231 | 159 | 81 | 6 |
| 44% | 73% | 34% | 45% | 31% | 10% | |
| I intend to use my existing scheme provider | 373 | 35 | 196 | 62 | 54 | 25 |
| 22% | 9% | 29% | 18% | 21% | 40% | |
| I intend to seek help from my accountant | 242 | 19 | 120 | 55 | 41 | 7 |
| 14% | 5% | 18% | 16% | 16% | 11% | |
| I intend to seek help from an adviser | 88 | – | 34 | 26 | 18 | 11 |
| 5% | – | 5% | 7% | 7% | 17% | |
| I’m going to search the market and do the research myself | 70 | 15 | 7 | 26 | 20 | 2 |
| 4% | 4% | 1% | 7% | 8% | 4% | |
| I’ve already made a decision and secured a scheme | 33 | – | 2 | 1 | 21 | 9 |
| 2% | – | * | * | 8% | 14% | |
| I intend to speak to my payroll provider | 16 | – | 7 | 6 | 2 | 1 |
| 1% | – | 1% | 2% | 1% | 2% | |
| I’ll ask for advice from my trade body | 12 | – | 8 | 2 | 2 | – |
| 1% | – | 1% | 1% | 1% | – | |
| I’ll talk to my peers and seek recommendations (referral) | 2 | – | – | 2 | – | – |
| * | – | – | 1% | – | – | |
| Don’t know | 134 | 32 | 70 | 11 | 18 | 2 |
| 8% | 8% | 10% | 3% | 7% | 4% | |
What this tells us
A significant proportion (14%) intend to get help from their accountant and 5% are going to consult an IFA. A small proportion (4%) are going to search the market and do the research themselves. Only 2% have already made a decision and secured a scheme.
And here are what the same sample answered to the question “How important do you consider your choice of provider to be?
| No. Employees | ||||||
| Total | Sole trader | 2-5 | 6-10 | 11-50 | 51-250 | |
| No of employees surveyed | 450 | 50 | 75 | 75 | 150 | 100 |
| Total number of employees in the UK | 1721 | 375 | 674 | 351 | 257 | 64 |
| Very important | 420 | 100 | 134 | 78 | 76 | 32 |
| 24% | 27% | 20% | 22% | 30% | 50% | |
| Important | 567 | 53 | 226 | 178 | 87 | 23 |
| 33% | 14% | 33% | 51% | 34% | 36% | |
| Neither important nor | 226 | 46 | 100 | 36 | 41 | 3 |
| unimportant | 13% | 12% | 15% | 10% | 16% | 5% |
| Not important | 137 | 33 | 66 | 17 | 19 | 3 |
| 8% | 9% | 10% | 5% | 7% | 4% | |
| Don’t know / haven’t thought | 371 | 143 | 149 | 42 | 34 | 3 |
| about it | 22% | 38% | 22% | 12% | 13% | 4% |
What this tells us
Four in ten (44%) small and medium sized companies haven’t given any thought to how they’ll go about finding a pension scheme to comply with the new auto enrolment legislation.
Despite a large proportion of SMEs admitting they are yet to think about their pension scheme, over half (57%) of firms surveyed think that their choice of pension provider is either important (33%) or very important (24%). Only 8% think it is unimportant
This is what these employees responded to the question “Do you think offering a good quality pension provides an opportunity to improve a) employee retention, and b) the attractiveness of the company to your employees
| No. Employees | |||||||
| Total | Sole trader | 2-5 | 6-10 | 11-50 | 51-250 | ||
| Total in the survey | 450 | 50 | 75 | 75 | 150 | 100 | |
| Total number of companies in the UK (000s) | 1721 | 375 | 674 | 351 | 257 | 64 | |
| Yes, I think it will help with employee retention | 693 | 97 | 301 | 162 | 95 | 38 | |
| 40% | 26% | 45% | 46% | 37% | 60% | ||
| Yes, I think it will help to improve the attractiveness of the company to potential employees | 553 | 75 | 187 | 165 | 92 | 34 | |
| 32% | 20% | 28% | 47% | 36% | 53% | ||
| Not sure | 867 | 243 | 345 | 125 | 132 | 22 | |
| 50% | 65% | 51% | 36% | 51% | 34% | ||
What this tells us
Four in ten (40%) believe offering a good quality pension scheme will help with employee retention and nearly a third (32%) think it will help to improve the attractiveness of their company to potential employees.
The Pension PlayPen is the only website in the UK dedicated to helping SME’s select workplace pensions. Our principal users are Accountant, Advisers, and employers direct. Within the latter category we see purchasers within employers coming from Finance, HR and Payroll. For very small employers , the principal purchased is taken to be the MD/Founder.
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