NOW- that’s what I call good news!


With over 1.2 million small and micro firms yet to tackle auto enrolment, new research from workplace pensions provider NOW: Pensions reveals that the number of employers planning on contributing more than the legislative minimum has nearly doubled in the past year.


Of the 400 SMEs surveyed, nearly one in three (30%) say they plan to, or will consider, contributing more than the legislative minimum when they enrol their employees into a workplace pension. This compares to nearly one in five (17%) of SMEs surveyed last year**.


Of those that intend to be more generous, 17% say they plan to pay more than the minimum from the outset with a further 13% stating that they will pay the minimum initially, with a view to increasing contributions over time. This is an improvement on 2014 when 8% of SMEs surveyed said they intended to pay more than the minimum with a further 9% stating they will pay the minimum initially with a view to increasing contributions over time.


Waking up to the benefits of a more generous pension

Over half (57%) of those surveyed who intend to pay more than the minimum say they believe it will help with the recruitment and retention of employees. One in two (51%) hope that by contributing more, their employees will be encouraged to do the same. Over a third (39%) think the minimum contribution has been set too low for a comfortable retirement. Nearly a quarter (24%) say they don’t offer any other benefits so are happy to spend a bit more on providing a more generous pension while an equal proportion believe it is the employer’s responsibility to ensure employees have a healthy pension pot that will provide them with a comfortable retirement.


Of all the companies surveyed, 43% say they think offering a good quality pension helps with employee retention while a third (34%) think it helps to improve the attractiveness of the company to potential employees.


Morten Nilsson, CEO, 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.”


Compliance top of the agenda

Of the 44% of firms that plan to make minimum contributions, over a third (36%) say it is because their focus is on ensuring compliance. While a similar percentage (32%) claim they want to keep things simple and think paying more would complicate matters, while nearly a quarter (24%) say keeping costs low is a priority. An honest 16% say they don’t really want to offer a pension at all so plan to keep costs as low as possible.


Nilsson continues: “There’s a danger that, because the government has set the contribution level, employers will assume that auto enrolment minimum contributions are sufficient to provide a comfortable retirement for their workforce.


“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. If employers contribute even a small amount more than they are obliged to do, this can make a big difference to employees’ final pension pots.”


NOW- that’s what I call  pensions good news! 

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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6 Responses to NOW- that’s what I call good news!

  1. Gerry Flynn says:

    Yes very good news but what will happen if the Government does away with tax relief on pension fund contributions?

  2. henry tapper says:

    It depends on what they do to replace tax relief- tax free at the other end’s one thing – but it’s the top-up that may be of more immediate interest. I hope that it is better targeted than the current system of tax-relief!

  3. Gerry Flynn says:


    You have 26 million people who pay lower rate tax in the UK, in addition approx 5 million pay the higher rate and yes you have a percentage of people who unfortunately do not benefit from tax relief because their earnings are below the threshold.

    It is those who do not benefit from the current system that should be targeted with some form of credit to make up for the lost tax relief, leave the vast bulk of tax payers with the current system, to change it is going to be the biggest disincentive to save for retirement, not for those paying top rate tax as they probable no interest in pensions, but for the ordinary person.

  4. henry tapper says:


    If you receive pension relief at source on a contract based plan (or in NEST or perhaps Peoples Penison) you will get 20% extra in your pension whatever you earn and whatever tax you pay (or don’t pay_. If you don’t pay tax and are in a “net pay” scheme, you don’t get this extra 20% paid in.

    Amazingly, this is not pointed out to most trustees who are inadvertently denying hundreds of thousands of pension savers, their right to pension tax relief.

  5. Gerry Flynn says:


    Yes of course you are right, (brain frazzled due to heat wave we have been having), but I have come across Insurance company’s that claim it on the employees behalf and also the individual could claim it through their tax return. But what the the Government is talking about will affect more than the hundreds of thousands you refer to but millions.

  6. henry tapper says:

    It all depends what incentives the Government use over the pure TEE of ISAs. Theoretically it could be cost neutral but fairer to all

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