Most employers in the retail sector don’t plan to contribute more than the legislative minimum when they enrol their employees into a workplace pension, according to new research.
Workplace pensions provider NOW: Pensions said that just 5% of retail bosses operating in small and medium enterprises intend to pay more than the legislative minimum, with an additional 5% intending to increase their contributions over time.
According to the survey, 40% of employers in the retail sector said they wouldn’t pay more than the minimum requirement, while 50% said they haven’t decided how much they would contribute to the workplace pension scheme.
The law says at least 1% of employees’ ‘qualifying earnings’ must be paid into their workplace pension scheme, rising to 3% by 2018.
Qualifying earnings are either the amount an employee earns before tax between £5,772 and £41,865 a year or their entire salary or wages before tax.
The employer chooses how to work out their workers’ qualifying wages.
The new research was conducted by BDRC Continental business omnibus on 450 SMEs across eight sectors in March.
In the service industry, 12% of employers are expecting to contribute more than the legislative minimum when they enrol their employees into the workplace pension.
Over half (56%) of all employers surveyed who intend to pay more than the minimum say they believe it will help with the recruitment and retention of employees, while four in 10 think the minimum employer contribution has been set too low by the government.