Four out of five employers think minimum contributions under auto-enrolment should rise, according to a survey conducted by Hargreaves Lansdown.

The survey, answered by over 400 businesses, has found that a quarter of employers would like to see contributions go up to between nine and 10 per cent, and a fifth want them to be between 11 and 12 per cent. Although almost 20 per cent of employers do not want to see contribution rates change, more than a quarter want to see minimum contribution rates rise to 15 per cent of salary or more.

There is also shown strong support to expand auto-enrolment says Hargreaves Lansdown, with 55 per cent of employers supporting a lowering of the earnings trigger below its current £833 per month level. 53 per cent of employers also favour reversing the rule that stops contributions from being paid on the first £5,876 of pay. 60 per cent also support the idea of using automatic enrolment through the workplace to nudge employees towards building an emergency cash fund.

A smaller proportion of those surveyed said that they would be happy to shoulder the increased cost of retirement saving. Only six per cent think that they should cover all the cost of a contribution increase, whilst 31 per cent are of the view that they should take on a greater share of the cost increase.

Hargreaves Lansdown also found that employers have mixed feelings about the how many of their staff will stay in their company pension once contribution levels increase to a minimum five per cent in 2018 and eight per cent in 2019. One third predict that opt-out rates will be below 10 per cent, whereas 15 per cent see them exceeding 20 per cent.

This may explain why more than a third said that they were worried that their staff would not be able to afford to retire. To help avoid this scenario, over half of employers are keen to see more workplace financial education to boost understanding amongst their staff. 30 per cent of them said that improving the provision of financial education in schools would be the most effective way of stopping a savings crisis.

Hargreaves Lansdown senior pension analyst Nathan Long said that the survey had shown a turnaround in the attitude of employers towards auto-enrolment, which is about to celebrate its fifth birthday in October.

“[It] was met originally with groans from employers who perceived further disruption to their staff and an increase to their staffing costs,” explained Long.

“Only five years on, and employers are now calling for auto-enrolment to go further. Employer support to get more people saving at a greater rate and with a greater cost shouldered by the employer suggests the next wave of auto-enrolment can be as successful as the first.”

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