Three out of 10 SMEs expect to pay more than the auto-enrolment minimum into their employers pots according to research from the Department for Work and Pensions.
The research shows 38 per cent of firms with between 50 and 250 staff will pay all employees more than the minimum, compared to 29 per cent for firms with up to 9 staff.
It also shows that an overwhelming majority – 83 per cent – of all SMEs are very likely or quite likely to use the same pension scheme for all their workers, with little variation by employer size. The survey did not ask whether an employer currently had pension provision.
An even higher proportion of SMEs – 87 per cent – employ nobody earning £60,000 a year, the threshold beyond which an 8 per cent contribution would breach the Nest annual contribution limit.
But 30 per cent of employers with 10 to 49 employees and 63 per cent with 50 to 249 have employees earning more than £60,000, with one in ten of these employers have more than 10 per cent of their workforce earning more than £60,000.
The TUC says this makes the case for lifting the restrictions on Nest unanswerable.
TUC general secretary Frances O’Grady says: “Nest now has a great track record in providing innovative pensions for low to middle earners. Lifting the restrictions will not alter this.
“Nest is the only pension scheme that cannot say no. It has a public duty to accept every employer, even those that pension companies would not want as customers or only do so at charges well above Nest levels.
“Smaller employers without in-house pensions expertise are those most likely to want a single pension schemes and also employ very many workers on low to moderate wages. The restrictions are likely to prevent Nest reaching many in the target market parliament intended. The case for lifting them is now unanswerable.”