Over half, 66 per cent, of a proportion of UK employers are prepared to increase or match pension contribution increases alongside pay rises, it has been revealed.

According to a survey of over 300 UK employers undertaken by Harris Research for Royal London, 66 per cent said they were prepared to offer a facility for members to raise their pension contributions when pay rises and 62 per cent said they would be likely to match these increases.

Furthermore, just over three quarters, 78 per cent of firms said that they “care” about workplace pensions and 77 per cent noted that they thought a workplace pension was an “important benefit”.

While some employers were willing to offer and promote contribution increases, however, other employers, 35 per cent, though that the main responsibility for increasing workplace pensions saving lay with the member. A further 30 per cent said increases were the responsibility of the pension provider, 18 per cent said it was the duty of the government and six per cent said employers and five per cent said advisers had the main role to play.

Prior to the statutory auto-enrolment increases set to come into force in April this year and again next April, Royal London director of policy Steve Webb noted that employers have a “crucial part” in encouraging their employees to save more. This is largely due to the fact that it is agreed among the majority of experts that the 8 per cent total contribution rate will not be enough to provide a substantial retirement for workers on middle and higher incomes, Webb added.

“The willingness of employers to consider ‘automatic escalation’ of contributions to coincide with pay increases is very encouraging. This approach has worked well in the US and in some leading UK companies and offers the best prospect of getting contribution rates up to realistic levels.

“To continue the success of automatic enrolment, schemes must be reviewed so that employer’s needs and long term goals are met. But it’s not just about the scheme that’s in place; it’s about how its benefits are communicated to employees. Employers, under the guidance of financial advice, must look to send out regular and engaging communications to their staff, to actively encourage them to save more,” Webb concluded.

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