The Government’s report on employers’ attitudes to per-sonal accounts is riddled with anomalies and underestimates the dangers of “levelling down”, says Standard Life head of pensions policy John Lawson.
The research from the Department for Work And Pensions is based on a survey of 2,516 private sector employers in the UK. It says only 1 per cent of the 1,610 employers which offer a pension say they are likely to reduce the level of contributions and 2 per cent say they are likely to either close or restrict eligibility.
But the report says 34 per cent of employers with an open pension scheme are not likely to apply for an exemption from personal accounts, meaning staff would be automatically enrolled into personal accounts. Seventeen per cent say they are unsure over applying for an exemption.
Over half of the employers in the survey are not making contributions and only 28 per cent are contributing 3 per cent or more. Employers have to pay in at least 3 per cent to be eligible for exemption.
Lawson says all these schemes would have to close or level down, meaning the report’s predictions for levelling down are underestimated.
He says: “This would be laug-hable if it were not so serious. The report is full of glaring ano-malies but the Government is basing pension policy on this.”