According to the results of a recent survey, the average combined pension contributions by employers and employees to small organisations’ defined contribution (DC) pension schemes have remained the same since 2010.
The findings come from a survey conducted by the Association of Consulting Actuaries (ACA), which looked at businesses with 250 employees or less; and the results have been described as “alarming” by the ACA.
The results of the survey have revealed that combined contributions into trusted-based schemes remained static at nine per cent of earnings; whilst contributions into contracted-based DC schemes have remained just over 7.5 per cent – the same figures as 2010.
In addition to highlighting that contribution levels have flat-lined, the findings from the survey of over 340 businesses also revealed that those who took part believe that financial incentives, such as reduced National Insurance rates and a reduction in corporation tax, would be the best way to encourage increased pension contributions.
Following the survey, the ACA called the figures alarming, given lengthening life spans and lower investment returns; they have also called on the government to raise the eight per cent contribution minimum level under auto-enrolment.
Whether you’re an employer or an employee, if you want to discuss pension contributions or if you want to discuss the best pension scheme for your retirement plans, then contact me and I’ll be happy to help.
Steve Horton is a Chartered Accountant and a Chartered Financial Planner who specialises in helping clients to manage their pensions and investments