More than half of all employers (56 per cent), and most eligible individuals (64 per cent), support Government plans for automatic enrolment into a workplace pension scheme from 2012, new research from the Department for Work and Pensions (DWP) has found.

Seven million people are currently not saving enough to deliver the pension income they are likely to want, or expect, in retirement, and 2.5 million fewer employees are saving in a private sector occupational pension than in 1995.

The workplace pension reforms will require employers to enrol automatically all eligible workers aged between 22 and state pension age into a qualifying workplace pension scheme unless the worker chooses to opt out. Employers may choose either to enrol them into an existing pension scheme which meets or exceeds the minimum requirements set out in the reforms; amend their existing scheme to meet the qualifying standards; set up a new qualifying scheme; or enrol them into the National Employment Savings Trust (NEST).

 The research was based on a nationally representative survey of 2,550 private sector employers, with one or more employees, in Great Britain.  It found that:

•  Most employers already making pension contributions of three per cent or more expect to maintain, or increase, their level of contribution when they have to provide pensions for all their staff.
• While 94 per cent of employers contributing at least three per cent say they will maintain or increase levels for existing members, 81 per cent say they will offer existing contribution levels or higher to non members and new employees. 

Most workers who are eligible also support the reforms. They say that if they were automatically enrolled into a workplace pension scheme tomorrow they would expect to stay in the scheme.

• 90 per cent say the employer contribution is attractive; 75 per cent said they could afford to put four per cent of their wage into a workplace pension; and around half of those who expected to remain saving after automatic enrolment said they were likely to contribute more than four per cent of their pay.

Commenting on the study, DWP Minister Lord Freud, said:

“With only around half of employees saving into a workplace pension, our planned reforms are needed to prevent millions of Britons facing a penny-pinching retirement.

“It is encouraging that, despite the recession, the majority of employers are still in favour of pension savings.  We will work with business and the industry to make automatic enrolment work, so we can give millions more people the chance to save, and an independent review team is currently looking at how we get the details right.”

The Government announced on 24 June an independent review of how to make auto-enrolment work.  A team of three independent experts will report back in the autumn.