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SMEs reveal concerns over insufficient pension contributions

Nearly a fifth of employees do not pay in to their pension, but almost a third of employers contribute over 6 per cent of salary

Barclays Financial Planning conducted a study of 200 UK small to medium sized companies anad found that over half of these employers are concerned their employees are making insufficient contributions to their pensions and are actively encouraging their staff to increase them.

One in five of the employees working in these companies do not make any contribution at all to their pension.

Almost one third of employers put in over 6 per cent of salary towards a pension on behalf of their employees.

According to the Office of National Statistics, 55 per cent of members of defined contribution occupational schemes in the UK contributed less than 4 per cent of their salaries.

While one in four companies have total pensions take up by potential employees and a further 37 per cent have less than 25 per cent of employees in the company pension scheme.

Commercial Director for Barclays Financial Planning Stephen Ingledew says: “The research indicates despite the pension gap being on everyone’s radar, it is some way off being plugged. The fact that half of SMEs are taking steps to encourage their staff to do more is promising, but with two fifths of employees preferring a higher pay packet to a better pension deal, there is a danger pension provision could be overlooked in favour of more disposable income in the short term.”

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