Workers and larger employers are willing to increase their pension contributions beyond the auto-enrolment minimum, research from Aviva has found.
The provider’s research has found 52 per cent of people currently saving in a workplace pension would be willing to contribute more than 5 per cent of their salary, with 29 per cent saying they would pay in 10 per cent or more.
The research found 68 per cent of larger employers would be prepared to pay more than the 3 per cent AE minimum from 2019, with 13 per cent prepared to pay in 10 per cent or more. Amongst its own book of SME employers, 43 per cent said they would be prepared to pay more than 3 per cent of band earnings.
Aviva is publishing the findings of what it is describing as its auto-enrolment pre-review, which precedes the Government’s own 2017 review, tomorrow.
Aviva UK and Ireland Life CEO Andy Briggs says: “Even when minimum contributions rise to a total of 8 per cent in 2019, this still won’t provide an adequate retirement fund for millions of pension savers.
“Now that AE is embedded in over 250,000 businesses we need to build on the success we’ve had already and work out exactly how we’re going to crack this pension savings challenge.
“While AE is a positive development, there are still huge challenges. Average contribution rates in defined contribution pension schemes have consistently fallen since 2012 as employers and employees have adopted the minimum level of contribution as a default. The government, regulators, the pension industry and employers now need to work together to address this and give as many people as possible the best chance of a happy and prosperous retirement.”