Britain's smaller companies are failing to put enough money into staff pension schemes, or to persuade employees to contribute sufficient amounts to finance retirement, research published today will warn.
Millions of people working for all but the biggest companies are heading towards a retirement in which they will be dependent on meagre state benefits, it suggests.
The warning, from the Association of Consulting Actuaries, comes as smaller businesses prepare for the impact of legislation that will require them to enroll all staff in a retirement savings schemes, unless they opt out.
Only a tiny number of smaller firms provide a defined-benefits pension scheme where retirement income is guaranteed, while those offering non-guaranteed defined contribution schemes typically pay less than 8 per cent of staff salaries into the funds each year, including the contribution made by staff themselves, the ACA says.
The 8 per cent figure is significant because under the new legislation this will be the minimum requirement for all private pension schemes. The new rules will come into force in 2014.Reuse content