Higher cost to both sides, however better opportunity for employees to save for their pension. For the demographic of my employees I believe it would increase the number of opt-outs as the majority are paid NMW/NLW and have no real interest in pensions at this age More eligible workers and a higher cost to employers I would welcome it. Our employees under 22 have opted in themselves. Yes, agree this should be in place and it needs education alongside it on the importance of saving towards later life. For employers an increased cost. The employees at that age will be on low salaries so they may not want to be in. But there is also the level of salary would mean they would not go in automatically as their earnings are too low. Obviously it would be more costly to the employer but great for younger people to benefit. The impact would be essentially good for the employee, but costly for the employer. It would increase the workload for employers, having more people to enrol, but would be a benefit for employees because they can begin to save into a pension scheme sooner. Increased costs but inevitable - pension saving should be mandatory for all, but highly regulated with regards to administrative charges and easy access to modelling/forecast tools. Mandating it for all would remove the ongoing administrative burden from employers with re-enrolment, postponement etc. and employers would know the cost. It would make low skilled workers more expensive to employ. I think this it the right way to go. As a nation we do not have enough people of working age contributing towards the National Insurance figures and the State Pension will disappear. We need to encourage people of working age to contribute towards their own pension in readiness for retirement. Employers will not be happy and may try to keep salaries below any threshold so they do not need to make contributions and Employees of this age may not understand the importance of paying into a pension from such a young age. Personally I think it is fabulous. However employees do not seem to understand that this will benefit them in retirement, lots of work for employers The report also suggests removing the link to the Lower Earnings Limit so that contributions are calculated from the first pound earned. Once again a huge number of comments and opinions were received which are represented by the following: I think this is more transparent - if after banded earnings contributions are 4% I think this should be made clear to employees, most employees will believe they are contributing 5% when in reality they aren't. Increased employer costs and potentially higher opt out rates due to higher employee contributions. As an employer we would budget accordingly. Employees on low wages may not wish or be able to save for pensions so opt-out. Greater hardship for lower paid employees and SMEs Both employers and employees will not like this change initially but the cost to both will not be that bad. Employees will start to see the benefit once they receive annual pension statements. Apart from the obvious on costs to employers, we feel that the opt outs would increase again. There have been comments that the government are giving them a living wage in one hand and reducing the impact on the net pay due to auto enrolment. Again, this would prove costly for us as an employer, but I feel it’s fair on employees, and would hopefully get more people saving for their future
CIPP POLICY AND RESEARCH TEAM PAYSLIP STATISTICS COMPARISON
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