UK Staff Pensions Expected To Be Largely Unaffected By Pandemic
New data shows that, despite the difficulties of the pandemic, most companies in the UK that offer defined contribution schemes have not reduced their pension contributions.
Within these schemes, both employee’s contributions and employer’s contributions are invested. The proceeds are then used to buy a pension and/or other benefits at retirement.
According to the latest CBI/Mercer Pensions Survey, most employers (86%) continue to see a strong business case for providing competitive workplace pensions, despite the difficulties of the pandemic. The same percentage of companies also said they feel a moral obligation to help employees to save for retirement. The survey was completed by 221 firms across the UK.
Meanwhile, 76% of senior executives who responded to the survey said they believe that, going forward, business contribution rates higher than the current 8% statutory minimum will be required to ensure staff have an adequate income in retirement.
Meanwhile, the UK government says that from October 1, pension schemes with an asset value of £5 billion or above must report the risks and opportunities that the climate crisis poses to their investments.
According to the survey, 47% of UK companies with a defined contribution scheme say that disclosures will be a helpful way to engage staff with their future savings. However, understanding the requirements is low amongst trustees (8%) and employers (5%). Many businesses believe the cost of publishing complaint TCFD-aligned disclosures will be larger than the government’s £15k estimate.